BHIT: The Next BUMI?

Not long ago, it was rumored that stock of Bhakti Investama (BHIT) will be pulled into position of 200, because the company will soon complete its acquisition of the mining company. Well, I can only say: one more unclear news come out from BHIT. Surely, if the shares are pulled by market maker, then BHIT could have returned to the position of 200, but that if it is really pulled.

I have reminded you, the investors, to not mess with BHIT on my previous blog article on last April 28. Here’s the link. In general, I mentioned that BHIT movement is not natural at all. You’re almost totally unable to predict the movement either using the fundamental, technical, or psychological analysis. Because almost 100% of BHIT movement only influenced by the actions of the big dealer, so in the end you can only speculate on its stock price in the future without any direction at all. Well, do you want to invest your money on something that is not clear at all whether it will give you profit or even a loss? I won’t do that!

So does that mean that the BHIT stock price in future cannot be predicted at all? Not really. We still can predict the future movement of BHIT by analyzing the information issued by the company and the company's corporate actions, though, of course, the accuracy of this prediction is not as good as when we apply stock analysis we used to use. But it's better than no guidance at all, isn’t it?

Ok, Let’s get started.

Actually there had been a lot of investors who trapped when BHIT suddenly jumped, and even got above 1,000 in early April. Those who doesn’t get a change to enter feel disappointed, after BHIT then freefall to the 200's in early May. Surprisingly, the investors seem undeterred and still believe on Hary Tanoe’s play. Driven by a variety of outstanding info that it BHIT will be ‘re-fried’, investors, or certainly speculators, back into BHIT.

In the meantime, you must not believe the rumors related to BHIT, with the words ‘pulled'. Since early May, BHIT have been regularly issued rumors like this. Prior to this it is said that BHIT was pulled into position 200, then at 11th of May when BHIT was in position of 290 even mentioned that BHIT will be pulled into position 500, which later proved to be a big liar.

When BHIT rumored to distribute bonus shares by 10% through the issuance of new shares on 21 May, the analysts mention that BHIT will rise to 315. Once again, it was a big mistake. Actually I do not understand, on what basis it is stated that the bonus shares will make BHIT stock rise up? It’s a common knowledge that the issuance of new shares will only make the relevant company's share price down!

And the most audible one is when BHIT is mentioned to have acquired 8 coal mining concession in South Sumatra on May 5. It may be that this is one of Mr. Harry’s strategies to keep BHIT prices, because on May 5, the price was at its peak of 1,020, so it is very prone to profit taking. But the attempt failed. After that date, BHIT was still moving down. Besides profit taking, it happened because the news that the acquisition of oil blocks in Papua by BHIT has begun to diminish its echo, after the investors began to realize that it seems likely that the oil blocks are in fact does not produce, because the exploration phase itself will be started in 2011.

So when Mr. Hary announced the acquisition about those 8 KP of coal mine, the investors already consider it will not work. In fact, from the eight KP, only 1 that already in production. As a result, BHIT is unable to survive in the top position and eventually return to the position of 200’s. Even now it’s in position of 130.

So the conclusion?

Judging by the indication, it seems that Mr. Hary is trying to be 'the next Bakrie'. Bakrie’s condition itself is currently in a big hit, following the drop of its ‘Bakrie Seven Brothers (B7)’ as a whole, so Mr. Hary saw these conditions as an opportunity to divert the attention of investors who are speculation enthusiast to his shares. And what is used as ‘the game’ is BHIT, which then swerved into natural resources company. It is because the main game of Bakrie, Bumi Resources (BUMI), also dabbled in natural resources.

So is it true that BHIT will be pulled up to 200, or even above it?

Seeing the persistence of Mr. Hary in running BHIT, the opportunity still remains. However, in a bad atmosphere like now where Composite Index is in the position of 2,500's, and there is no indication of going back to the 2,900 level, then surely the decision to enter into BHIT is a very, very risky decision. But what if you've already holding this hot stuff? Is is better to cut loss or what? My advice, you need to wait until the stock index to abate, which will probably take place next June. Looks like the market maker of this BHIT will enter the ‘kitchen’ when the index started moving up again.

However, in the end, I suggest you should not go near this stock.

Original article was written at May 26, 2010