AmBank the Operator. They should show their profit and loss at the expiry of the CA. I guess, they can easily make RM30m to RM50m out of the ignorance of the players. So cool, love to be in AmBank's seat. Laughing at the players donating so much money. The higher it goes, which is very possible, the more AmBank will make.
Keladi, thanks for sharing. Csn you help by giving an actual example. Seems like rm3.72 is spit to half. But don't seem to see co relation of 0.1669 and 0.3333?? Thanks for help Agsin
currently the conversion ratio of ca is 6:1, 1/6 = 0.16667
after bonus issue done, conversion ratio will changed to 3:1, therefore 1/3 = 0.33333
the bonus issue is 1-for-1
example: today closing price of mother is 3.34 while ca is 0.275,
ppl who pay 0.275 for ca expect the mother share to be 0.275x6 + 3.72 = 5.37 on maturity *5.37 is the expected price on maturity pre bonus issue
let's say we apply the changes after bonus issue is done, 0.275x3 + 1.86 = 2.685 on maturity *2.685 is the expected price on maturity post bonus issue
2.685x2 = 5.37 <- convert back the share price to pre bonus issue
so theoretically the bonus issue have no effect on the price of ca
but in real life, pre the bonus issue, dsonic would need to gain 0.275x6 = 1.65, on top of the exercise price of 3.72 to become 5.37
post bonus issue, the ex price 1.86 need to gain 0.275x3 = 0.825 to become 2.685
comparing a gain of 1.65 vs 0.825, even though the % of gain is the same to reach the expected price on maturity when compared with the respective ex price, but if we compare absolute figures, an up of 0.825 seems to be more likely than 1.65 right. Therfore i expect ca to move higher after bonus issue
p.s. 1.65/3.72 = 44.35%, 0.825/1.86 = 44.35%
p.p.s the above example is just my own interpretation, therefore take it with a pinch of salt =D
Keladi, thanks for your taking time to share. If you calculations is correct, operators are pushing down the price more next week so that they can push up the price before ex bonus announce ...
Between CA and WA, the real great difference lies in the intention of the issuer. For WA, it is issued by the company concerned as a fund raising instrument. Hopefully, at the end of the expiry date(5 to 10 years later), the shareholders will be able to exercise the warrant and bring in cash for the company. But CA is issued by a 3rd party issuer, on a shorter exercise period of 1 year or less. The issuer will usually choose a good time(when price is already high enough) to issue the warrant. Hopefully, at the end of the expiry date, the warrant will lapse worthless or less than the issue price. Sometimes, the issuing institution can also go into the cash market to trade the mother share(with a view to affect the CA price). Like that, the 3rd party issuer can make money out of it, from the warrant-holders.
For this CA, does it occur to you why we need 6 CA and RM 3.72 to convert 1 mother share? What are the chances that the mother share will end above RM 5(or RM 2.5 if adjusted) at the end of the expiry date?
Please do your own analysis and trade at own risks.
ca issuer would hedge their risk, ie by holding the mother share
structured warrants are like gambling, we're basically betting that the mother share would bull for ca
if u go genting the odds are surely against u, but we can make an educated guess on the mother share price if we do our research on the company
the further we are from the maturity date, more uncertainty towards the the price that will be on maturity, and the possibility to make profit amidst the price fluctuations
there's a time value element in the pricing of structured warrants, therefore it is not to be hold until maturity
the best time to profit from call warrants is when there's will be a big upside in the price movement and everyone is so optimistic, the dsonic forum for the past 1 month is a very good example of this
above is my from own understanding and experience, as always, trade cautiously
"Kalau takut dilambung ombak, jangan berumah di tepi pantai"
Yes, the CA issuer will usually hedge its risk by holding sufficient units of the mother shares.
From my observation, to attract buying into the CA, it had pushed up the mother share in the first few days after the CA was listed in March. Now, its price is on a gradual decline.
Next, if we look at the mother share, it has gone up a lot in the past 1 year. A lot of good news has been priced into the counter. What more can we expect?
Of course, the CA can still fluctuate intraday and traders can still make some money, if not greedy. But it should deteriorate more nearer to expiry date.
Just sharing my limited knowledge. Hope to caution the novice investors from keeping the CA on a longer term.
I have written on this weeks ago, DSonic CA is purely for traders, speculators and gamblers. Fundamentally and theoretically, it does not worth a sen.
Finally someone wrote a one whole page in this week's Weekly - The Edge. Its premium is more than 70%. However, the premium for IOIPG CA is less than 10% and worth considering.
This dsonic-CA is expensive and high premium but I notice it never retraces back to it's issue price of 15 sen . Today it performs like the 3rd day after listing , up almost 50% . Unlike the karex -ca , karex cb , cc all down below 15 sen . Thanks to it's famous mother share .
To me, this is just a dead cat bounce. There could be a few bounces before it is pronounced dead. Syndicate needs to push up the prices to clear the stock collected over the past few days. Nothing new.
The Board of Directors of Datasonic Group Berhad ("Datasonic") wishes to announce that the shareholders of Datasonic have at the Sixth Annual General Meeting ("6th AGM") held on Tuesday, 27 May 2014, approved all the resolutions as set out in the Notice of the 6th AGM contained in the Annual Report for the financial year ended 31 December 2013 of Datasonic.
he Board of Directors of Datasonic Group Berhad (“Datasonic”) wishes to announce that the shareholders of Datasonic have, at the Extraordinary General Meeting (“EGM”) held on 27 May 2014, unanimously approved the proposed bonus issue of 675,000,000 new ordinary shares of RM0.10 each in Datasonic (“Datasonic Shares”) (“Bonus Share(s)”) to be credited as fully paid-up at par, on the basis of one (1) Bonus Share for every one (1) existing Datasonic Share held by the entitled shareholders of Datasonic on the entitlement date to be determined later.
The EGM was convened at 10:50 a.m., immediately after the conclusion of the Sixth Annual General Meeting (which was held at the same venue on the day at 10:00 a.m.).
sdabrother, you dare to buy at 0.355, this is call warrant, very high risk. this afternoon up bacause bonus share approved in EGM, tomorrow might drop back...good luck to you.
assuming mom share close at RM4 on June 5, it will become RM2 on June 6. CA conversion price is RM3.70, ratio is 6:1. What do you think will happen to CA?
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
sdabrother
21 posts
Posted by sdabrother > 2014-04-21 14:05 | Report Abuse
i buy at 0.35 but after that no power..not going up. any comment?