TFP-WA: Issuance of Deep in-the-money Warrant Affect Warrant’s Valuation

Written by Jess Lu

Low price warrants are normally are well liked by retail punters seeking to speculate on such instrument. This usually leads to low price warrants trading at high premium.  Nevertheless, a recent warrant issued by Ace Market listed TFP Solutions Berhad bucked the trend and TFP-WA has been trading at a discount for most of the time since it began trading on Bursa Malaysia on 21 February.  TFP-WA discount has narrowed somewhat after some savvy investors looked to have taken the opportunity to arbitrage on it.  Some 1.46 million warrants, representing just under 1.5% of total number of warrants issued have been converted in the beginning of March and the new shares listed have resulted in selling pressure on the mother share.

 

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