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I have 5000 share of Malton, my price is RM 0.75,
3500, currently loss about RM1100
But if I sell the malton-lr (15 cents) *2 = RM 300, loss RM 800 (but I think I will go ahead to subscribe)
So if i subscribe the right, I need to paid RM 2k ++ ( Stupid RM 10 stem duti and pos)
Total Paid = RM 5500.
What do I get:
2 RCLS - assume trade at 55 cents
Plus free 2 warrant and 1 bonus
Assume mother trade at 0.55 cents and warrant at 15 cents.
Total sell cost(if I sell) : (5+1)*0.55 + 2*0.10 + 2*0.55 = RM 4600
Total lost= 5500 - 4600 = RM 900
RM 1.1 k compare to RM 900 loss, which one you choose???
Below is the information get from Alex Lu:
Source:http://nexttrade.blogspot.com/2011/06/malton-unique-trading-opportunity.html
MALTON has gone ex for a Rights Issue of 2 RCSLS of RM1.00 each [c/w 2 free warrant & 1 free share] for every 5 MALTON owned on ex-date. If you subscribed for the RCSLS, you would get the free warrant & share. If you don't, you get nothing.
The RCSLS is convertible to share on 1-to-1 basis. Since you are paying RM1.00 for each RCSLS, you are sure to be at a loss but the issuer sweetened the deal by giving you 2 warrant & 1 share free. Would that be sufficient to make up for the loss? The bonus share is worth 50-60 sen. The warrant is worth 10-12 sen (assuming a 20% premium & ignoring the negative intrinsic value as the exercise price is at RM1.00). If you used the lower numbers, 2 warrants plus 1 share are worth 70 sen. If you were to use the higher numbers, they are worth 84 sen. Your RCSLS is probably worth 50-60 sen- which will give you a loss of about RM0.80-1.00 for 2 RCSLS. Some may opined that the RCSLS should attract a higher value, due to the high coupon rate of 6%. I doubt it would be worth more than 60 sen, if the share is trading at 50-60 sen. (Currently, it is trading at RM0.52). As such, the exercise has a high odd against a profitable outcome for someone subscribing for the RCSLS, ranging from a small profit of 4 sen to a sizable loss of 30 sen for every 2 RCSLS subscribed. It is better to buy the RCSLS or the warrant after the whole exercise has been completed.
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