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Arbitrage Option as VS-WA nears expiry

The share price of V.S. Industry Berhad (VS) has been declining steadily since the beginning of the year after it reached a peak of RM2.62 in late January this year.  After the group released a disappointing third quarter results, which saw its net profit plunged by 58% compared with the third quarter of the previous financial year, VS share price hit a low of RM1.27 on 29 June before rebounding significantly to as high as RM1.80 in early October.  The share price has since then retreated to close at RM1.52 on 4 December 2018.

 

A mother share better than PRLEXUS-WA

When Prolexus Berhad completed its one for two rights issue in June 2016 at a rights issue price of RM1.00 per share, the share price of the company was above RM1.40.  However, the share price has been declining steadily for the most part of the last two and a half year, hitting a low of 55 sen in July this year before rebounding somewhat to 60 sen at the time of writing.  The company warrant PRLEXUS-WA, which came attached to the rights issue, plummeted from a high of 71 sen in May 2017 to as low as 13 sen recently before settling at 17.5 sen.

Impressive Gain for KGB-WA YTD Despite Trading at Discount

Kelington Group Berhad (KGB) has been amongst the star performers in Bursa Malaysia this year.  While most stocks in Bursa Malaysia suffered big drop in share price as a result of uncertain domestic and external factors, the share price of KGB has actually risen substantially.  At the closing price of RM1.23 on 19 November, KGB share price posted a year-to-date gain of 48%.   The company warrant, KGB-WA, managed an even more impressive gain of 77% so far this year, closing at 70 sen on the same day.

TOYOINK-WB: Banking on power project

The new warrant of Toyo Ink Group Berhad, TOYOINK-WB, started trading in Bursa Malaysia on 9 November 2018.  This warrant was issue free to shareholders of Toyo Ink on the basis of two warrants for every one share held.  The warrant traded as high as 26 sen on the first day of trading but this out-of-money warrant came under heavy selling pressure the next couple of days.  TOYOINK-WB closed at 15 sen on 13 November while the mother share ended trading at 76 sen.

PTRANS-WA can be short-term investment tools

The share price of Perak Transit Berhad has been declining steadily in October from a high of 30.5 sen on 1 October to a low 25 sen on 30 October.  However, the share price rebounded somewhat in relatively heavy volume after the company posted a respectable set of financial results on 1 November.  Perak Transit share price rose to 27 sen the day after and had held on to the gain on 5 November before the market take a break for Deepavali.  The company warrant PTRANS-WA ended trading at 10.5 sen.

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