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Malaysia Warrants News

Latest CBBC Funding Rate

This is the latest indicators including funding rates of CBBCs listed on Bursa Malaysia.  The figures are calculated based on last Friday’s closing price.

 

Why is UNISEM-CA Falling in Big Volume

Today UNISEM-CA is listed on Bursa Malaysia by issuer AmInvestment Bank and the warrant fell significantly from the issue price of 15 sen to about 13 sen at the time of writing on big volume.  Why is that so when Unisem share price is moving up?

 

The answer can be due to the fact that this structured warrant was issued at an issue price that is higher than the current implied price of new Unisem company warrant.  UNISEM-WR, the right to subscribe for Unisem new 5 year warrant with the same exercise price of UNISEM-CA, is now trading at about 42 sen.  UNISEM-CA, a structured warrant with the same exercise price and expires in March 2011 (tenure about 7 months), should not be worth more than the new unisem company warrant with a five year tenure.

 

UNISEM-CA has an exercise ratio of 4 to one.  This means that you need 4 warrants to entitle to exercise to one share whereas Unisem company warrant exercise ratio is one for one.  UNISEM-WR holder need to pay 10 sen to subscribe for new warrant so the implied price for the new warrant is about 52 sen.  With the issuance price of 15 sen, UNISEM-CA is equivalent to 60 sen adjusted for exercise ratio.  At 13 sen, adjusted price is 52 sen, which is the current implied value of Unisem new warrant.

 

So, the issuer just needs to buy the warrant rights and sell the structured warrant to make some easy profit.  Investors should take this into consideration when trading UNISEM-CA.

 

PJDEV New Warrant Implied Value at 14 sen

PJ Development Holdings Bhd (PJDEV) on July 26th  proposed a renounceable rights issue of up to 213.8 million new warrants in PJDEV on the basis of three new warrants for every eight existing RM1 shares held in PJDEV or shares held on an entitlement date to be determined later.  It also proposed a restricted issue of up to 42.8 million new warrants to the holders of unexercised 2000/2010 warrants (PJDEV-WB) on Oct 29, on the basis of three new warrants for every eight unexercised 2000/2010 warrants held on the expiry date.

 

The share price of PJDEV rose steadily after the announcement while PJDEV-WB rose even further to as high as 6 sen as its tenure effectively got extended by 10 years with a lower exercise price.

 

PRESTAR Major Shareholders Sell Warrants but Who Are the Buyers?

The major shareholdersof Prestar Resources Berhad has been disposing its out-of-money warrant (PRESTAR-WA) recently.  According to Bursa Annoucements, two companies linked to the major shareholders of the company, Fabulous Essence Sdn Bhd and YK Toh Property Sdn Bhd, disposed 10 million and 1.94 million warrants respectively on 22nd July and 19th July.  The price the warrants was disposed was at 6 sen.  This represent about 14% of total warrants outstanding.  Fabulous Essence still has 14.1 million warrants after the latest disposal while YK Toh Property has no more warrants.

BJCORP-JA "Dies" on the 5th Day of Trading

BJCORP-JA has been suspended this afternoon as it has triggered a Mandatory Call Event (MCE).  This is due to the mother share price hitting the call price of RM1.06.  BJCORP-JA was heavily traded last Friday when it began trading with volume hitting above 10.8 million units.

For those investors who bought BJCORP-JA on the first day of listing without knowing what the instrument is, they will be shocked to find out that BJCORP-JA got suspended on the fifth day of trading or on T+4 after they bought the callable bull certificate.  It would be better had the investors not picked up and paid for BJCORP-JA.  Even if they were forced sold today, the investors would have got back a little more.

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