Posted by Probability > 2016-03-21 19:02 | Report Abuse

Dude...aren't u little too late to inform us this discovery.. now? :(

Posted by cephasyu > 2016-03-21 19:04 | Report Abuse

Sorry I have a full time job :(
Don't worry, I don't think the WE will open up at 1.57 tomorrow. There will always be chance. Maybe US markets are bad tonight?

Posted by Money_Master > 2016-03-21 19:15 | Report Abuse

Thanks for sharing

Posted by Old90 > 2016-03-21 19:21 | Report Abuse

Good sharing here, thank you.

Posted by cytew > 2016-03-21 19:29 | Report Abuse

The huge discount was mainly due to extremely cheap Gamuda WRs that were traded within restricted number(5 days only) of trading days previously.So now It will take times to reach the equilibrium

Posted by murali > 2016-03-21 19:34 | Report Abuse

At one time OTB sets a TP 10% premium for WE, after a while he quietly revised to 6%...

Posted by murali > 2016-03-21 19:35 | Report Abuse

In order for WE to go up further mother has to move up.....no 10% premium....

Posted by Apollo Ang > 2016-03-21 20:02 | Report Abuse

already up so much since the warrant rights 1st traded......very overvalue now

Posted by voonyoke > 2016-03-21 20:12 | Report Abuse

Overvalued? I can't stop laughing.With premium on 3.85% and 5 years of period, it is overvalued? Genting-wa also traded with premium 5.58% at 2.07 and will expire in 2018. Don't you think Gamuda-WE is much worth it? With the coming MRT2 tunneling job worth at RM16 billion which is going to award end of this month, and many projects like Pan Borneo Highway, LRT3, Penang Transport Master Plan and Gemas-JB Double Tracking, Gamuda will move pass 5.00 and towards 5.50 soon. So Gamuda-WE is overvalued?

Posted by murali > 2016-03-21 20:15 | Report Abuse

So is it seriously undervalued,overvalued or fairly valued?

Posted by voonyoke > 2016-03-21 20:19 | Report Abuse

It is up to your judgement. Don't you see someone say is undervalued, another say is fairly valued and other say is overvalued. No matter what they said, the share price will perform accordingly to the company fundamental.

Posted by cephasyu > 2016-03-21 20:22 | Report Abuse

Hi Murali, first of all, thank you for your guidance :)
Indeed it is true that warrants > RM1 have low premiums. The Black Scholes model does address the implied leverage, however on a peer comparison basis, you are right in pointing out the observation that absolute value warrants (on Bursa at least) command lower premiums. I think that using an arbitrage "if > RM1, low premium" is a little odd, but the market does behave that way.

Shaun, thanks for your very articulated comment. I need to think about it for a little longer as I am under the impression that since the ex of the WR, the market has auto-adjusted the price of the mother. We would calculate the adjusted mother price if we wanted to compute the value of the warrant cum-WR but at ex, I think using the market price of the mother is sufficient.
Nevertheless, I will investigate your point. Thank you.

Posted by murali > 2016-03-21 20:25 | Report Abuse

Pe 17+,div yield 2%+...how much can be improved if they can get all the contracts??

Posted by murali > 2016-03-21 20:27 | Report Abuse

Gamuda mother is an elephane....that's why they have gamuda we to goreng goremg

Posted by Apollo Ang > 2016-03-21 20:33 | Report Abuse

genting-wa is also overvalued.....beware

Posted by Ven Felix > 2016-03-21 23:15 | Report Abuse

Gamuda's mother at $5.00 is the burning point. Stay closely ! To track the reaction..

Posted by tony89 > 2016-03-21 23:38 | Report Abuse

apollo, both gamuda-we and genting-wa overvalue? What makes you say so? because of almost 100% gain in Genting-wa?

Having say that, getting-wa price is around RM2.8 when the mother is RM10.

Could you explain more? thanks

Posted by Apollo Ang > 2016-03-22 09:38 | Report Abuse

can go up but the risk is there. later make 10% lost 30%. this type of risk i won't take

Posted by joerakmo > 2016-03-22 20:16 | Report Abuse

Perhaps should read this:

http://klse.i3investor.com/blogs/oldschool_jaejun/93538.jsp

A derivative can not have 'intrinsic value'

Black-Scholes is a PRICING formula.

Just to clear the terminology. cheers

Posted by tony89 > 2016-03-22 23:59 | Report Abuse

appolo. that would be different story now. Risk to award ratio

Posted by supersaiyan3 > 2016-03-23 08:43 | Report Abuse

cephasyu, this provides an arbitrage opportunity. You just arbitrage lah
“套戥”, you know?

Posted by The One > 2016-03-23 15:29 | Report Abuse

Are you sure its really undervalued? Many people could get trapped.. pity em..

Posted by vegebotak > 2016-03-23 15:57 | Report Abuse

Dead ctr