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Rights

Thanks tiandi for the time taken to explain. Its very clear to me now:)

 

john1980, please refer to the time table chart on earlier post provided by CDP, in order not to be confused please note the meaning of nil-paid RIGHTs.


1) Company A decided  to issue right (1 for 5)

2) I am still holding the 2 lot of share after BCD. Therefore, I am entitle for 400 extra share.
You must already HOLD 2 lots or buy 2 lots before BCD.   If this is true , then YES, you are entitled 400 RIGHTs.


Meanwhile,  CDP will process entitlement, Credit to your account 400 nil-paid rights, around BCD+3.
These are nil-paid RIGHTs, you have NOT paid yet.   You see in your CDP statement
CDP will post to your address the Document ( Prospectus, ARE form, return envelop,etc)

3) Right trading commences, pay for the 400 shares.
From BCD+3 to BCD+9 ,  trading of nil-paid RIGHTs in the market.


Since you choose to pay for the Rights and get that 400 share, you DO NOT sell your nil-paid RIGHTs already credited in your CDP account.
You have to make Payment and send in ARE to CDP during this period of subscription, reaching CDP before LD.

4) End of day, I would had 2400 shares. 
From LD onwards , CDP process all ARE/payment, credit rights, refund those rejected and notify successful application.

Assume your application is successful  , then  CDP will credit you with the 400 shares.

Yes, now you have 2400 shares, shown in your CDP account statement.
 

 

To reinforce my understanding

1) Company A decided  to issue right (1 for 5)




2) I am still holding the 2 lot of share after BCD. Therefore, I am entitle for 400 extra share.

 

3) Right trading commences, pay for the 400 shares.




4) End of day, I would had 2400 shares.  

 

john1980,

Yes, the rights trading period lasts for 7 trading days , guideline can be found at following CDP website link: http://www.cdp.com.sg/corporate/right_trade.html,  I copy here for ease reading:


Trading of Rights

You have a trading window of seven market days for your rights entitlements.

The board lot size to trade is dependent on the ratio of the rights issue. For instance, in a 1 for 5 rights issue, trading of the entitlements will be in board lots of 200 shares, which means you can sell in multiples of 200 on the 'Ready' market. Similarly, in a 1 for 4 rights issue, trading will be in multiples of 250.

If you bought rights entitlements during the rights trading period, we will send you the Application Form for Rights Shares (From B) and the rights prospectus the market day after your transaction. However, you will not be eligible to apply for excess rights shares.

You may read this time table  from   http://www.cdp.com.sg/corporate/right_schedule.html 

Schedule for Rights Issue



Notes
BCD + 3 is also the day CDP despatches the following to relevant shareholders:

Form A (Application Form for Rights Shares and Excess Rights Shares)

Rights Prospectus

* Based on calendar days. The rest are based on market days.

The above schedule only serves as a guide and actual details may vary.

 

 

Hi Tiandi, thanks for the reply. Really appreciate it.

I was just asking since I am new in this and I want to know the basic as much as possible. The company in question is Allcoreit and they are going to held a general meeting regarding the right issue. I am just assuming that everybody in the meeting agree on the right issue and the allocation is 1 for 5. I had a friend who got his shares bought back by singtel and he is holding odd lot of 800 shares. When I told him what he will do about it, he just say he will keep if for life for dividend.


Regarding "the nil-paid Company A R200 Right share is in the market for trading over a short life of 7-trading days". Does that mean company A R200 share can only be trade within 7 days?

 

Hello john1980,

you may like to read from CDP website for  FAQs on  RIGHT SHARES   http://www.cdp.com.sg/faq/right_faq1.html

First, you need to be sure whether you got the 2 lots of Company A shares before the Book Closure Date ( BCD) That will determine whether you are entitled to the RIGHT shares. If you buy the mother shares on or after XR date ( exclude - right date), then you are NOT entitled to the RIGHT shares.

One way of checking is by looking at your CDP statement.
If you have the right share entitlement, your CDP statement would have been CREDITED with the right shares and it will show like below:

 Security                free
Company A           2000
CompanyA R200    400

Also, if this is the case,  CDP would have already mailed to your registered address  the Document from the Manager of the Right Issues, application form for right shares and excess right shares (ARE) with returned  mail envelop for your ARE. If you have not yet received these you should get from your broker or call CDP customer service/hotline to get the document to your address.


The details on payment are explained in the Document. If you want to exercise to buy your allotment (1 for 5 or 400) of the right shares, you just need to read the document and follow the procedure for payment and send completed form to CDP before the dateline.  Payment is typically by a Cashier's Order, or banker's Draft and sent with the ARE.  ATM payment method is also available and it is easier. These instructions are stated in the Document. If you have any doubt, you can ask your broker, or call CDP hotline 65357511 to enquire on the procedure. .

By the way, the nil-paid Company A R200 Right share is in the market for trading over a short life of 7-trading days.


Odd  lots can always be traded, your broker is sure happy to do that for you because he earns commission.
If you do not like to trade odd lots,  you want to trade ONLY in board lot of 1000, you can sell away your 400 Company A R200 shares or buy  600 Company A R200 shares, these must be done during this 7-day period. The time table is available in the Document as well as in the sgx website. You can certainly know the date of these 7-day trading period.


Buying and selling of mother shares, right shares are all part of your own investment decisions that carry share market risk Without knowing what is company A and its Right, I do not think forumer can provide you with relevant suggestions.


Good luck

 

I had some questions regarding XR. Right now, I am holding 2 lot from company A and they are selling 200 shares for every single lot

 

My question is:

Let say I buy the shares, I would have a total of 2400 shares. Can I sell 2400 shares?


How do I made payment on these 400 shares? Will there other extra charges?

 

Is it ok to buy those 400 share or should I sell off all my 2 lots instead?