History and the extent :
Exactly nine years ago ( October 2011 ) RGEM reached its all time high Rs162.83 , trading 1,422,300 shares exactly. This tiny counter has only 2.4 Mn issued share quantity with 26.71% or 641,105 number of shares as Foreign holding. How tiny the counter is … buy 20,000 shares and your name will be listed in the next Annual report under the top 20 share holders list. ( LOL .. its funny up to an extent ).
Good entry point :
Technical charts indicated a good entry point day before yesterday and it was confirmed with the trading taken place during the yesterdays trading . It was unfortunate that RGEM couldn’t clear the price band due to the lack-luster behavior of the Market prevailed.
Fundamentals and Prospects :
Some argue that RGEM has no fundamentals to reach to a higher note and its always manipulated by a person who smart enough to collect 150,000 shares , which I agreed to an extent . But my opinion is that manipulation or Pump & Dump happens in all counters including JKH .
For me RGEM’s future is so bright with the country’s new developments , new attitude to promote local business and favorable policy decisions.
1) RGEM is eligible for a low interest loan ( 4 % ) which can be used to settle existing high interest loans and for future expansions.
2) GR government’s policy on mining license is so favorable for small scaled gem- miners so that the supply chain of raw materials ( Gems ) and the prices of same will be a plus point in coming quarters in favorable manner .
3) Prices of Blue Sapphire Gems of Sri Lanka are quite high in the International Market in present day , infact when inquired suprisingly got to know that a “ Royal Blue “ 1 carat has reached to a staggering high like Rs 900,000/- a carat , which is 3 times higher than last month .
4) RGEM has a bunch of expert / skilled work force whom can handle any volume of Export Orders including re-exports received from other internationals such as Thailand / India / German & USA.
5) Sri Lanka Gem Authority confirmed me yesterday that exporting market of Gems has never declined even in COVID first wave but increasing day by day amid tax concessions and many favorable decision of the new Government.
All these time RGEM was waited for a favorable ground for them to play their role in the economy … and now … they have all of them including a separate Ministry / Minister for the exact purpose.
Conclusion + Recommendations
Buy 5,000 shares at this price or below Rs 30/- and hold for another Quarter. I predict 20 % - 50 % return by then or before that .