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2010-05-26

FBM KLCI A Small Technical Bound Up

Today FBM KLCI did not bounds up strongly like most of the Asia share market. If we know the FBM KLCI is about to drop to more lower they are a put warrant FBM KLCI-HA may can bring some profit.

Initial Listing Information
Listing Date
:
25/08/2009
Term Sheet Date
:
18/08/2009
Issue Date
:
21/08/2009
Issue/ Ask Price
:
MYR 0.1650
Issue Size Indicator
:
Unit
Issue Size in Unit
:
150,000,000
Maturity Date
:
22/08/2011
Revised Maturity Date
:

Exercise/ Conversion Ratio
:
1,500:1
Settlement Type/ Convertible Into
:
Cash
Exercise/ Strike/ Conversion Price
:
MYR 1.0000

4 comments:

Ivan May 26, 2010 at 6:21 PM  

Bro,

X get me wrong, most of our put wararnt is issue by osk. Most of the pw are expensive , in term of premium, except KNM-HA :d

FBMKLCI-HA, is expensive for me.

Durian Edge May 27, 2010 at 7:38 AM  

Hi Ivan

Yap FBM KLCI premium is high about 18% but the expire date still have 400 days plus so OSK will move the share price between 18% to 12% premium due to the long expire date.

In my record OSK or CIMB will lower the premium when expire date is near they usually push the premium as high as 25% and lower it to 18%-12%, 8%-4% and 2% to -1%

If the FBM KLCI is going to drop sure FBM KLCI-HA will up a bit.

Now the situation for share to go down will more likely than up so if you buy call warrant with negative premium like PBBANK-CL will still risky.

Ivan May 29, 2010 at 11:30 AM  

Bro,

Thanks for your sharing.
I think malaysia issuer are not doing the right job yet. sorry to say it.

As part of SC requirement, the
issuer need to provide market liquidity for all their cw or pw. BUt yet, we can see they are doing, but maybe in certain criteria or market situation, they did not play their right job.

Eg: like TM-CI case , I did monitor this cw , and trade at -7%%huge discount. What happen for thus investor bought at high premium when it been listed? Is totally unfair for the cw holder to solf it at below 7% mkt price.

Therefore, I think SC shall amend and add in some new guideline such as the issuer need to make sure, the cw/ pw trade maximum at -2% disocunt.

With the reason of mkt is expected drop, and issue try to keep supply and discount and on the same time keep buying at huge step lower.. seller (investor ) sometime scare the price keep drop and hard to sell. .so end end sell back to the issuer at step lower price. Issue can use the unit to sell at higher price and this formula/ strategy keep repeat. Are this fair?

2) Issue seem are doing propietary trading. Are this fair? Perhaps we really need forward to study oversea trading in cw :D

For me, I always look at the intrinsic value of cw/ pw if want trade. Then will go to the mama -underlying share.

KNM-CB premium are quite attractive, but I don;t think KNM share can drop even further low after fail of M&A. Hence, I will not into this pw.

As what I can observe, even some of the cw are trade at disocunt,at this point of time , is really hard to make some money from mkt . The most important is because the issuer did not play perfect job to make the cw/ pw in the right fair value price.

Ivan May 29, 2010 at 11:35 AM  

Bro,

My trading style at this current mkt is :
a) look for americian type.. if issue did not play thie role perfectly, cw-holder can play their role to exercise it.

I did this before in my genm-cj...dont get me wrong, when cw holder exercise it, the issue need to declare the exercise under sc rulling.

CW holder want exercise instead of selling at mkt price, is because tht mkt price are lower than the real value of the cw :D. Thus other cw holder will follow, and this is bad image / reputation risk for the issue as they did not do their job perfectly.

For my case being, the issuer- OSK call me and persuade me y not sell at market price when they received my form. I told them the price is lower than what the genm-cj shall have. They say what happen if the price at mkt value= intrinsic value? I told them may consider.

After a few minutes, they "make it" at the right value, and i cancel my exercise and sold it at mkt price.

So, when market bearish and uncertainly and due to issuer did not play their job, is good for investor to buy the cw with Amercian type.. but tis type of cw are very less . ..

gd luck to all .
happy sharing :D

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My investment with RM5,000 initial capital have been growing since 2005.I found the stock market appears confusing and complicated, but it is most definitely based on logic "supply and demand". However, the laws of supply and demand as observed in the markets do not behave as one would expect. To be an effective trader, there is a great need to understand how supply and demand can be interpreted under different market conditions and how to take advantage of this Off Market Transactions in KLSE.

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