LKH Sp   

Special Dividend

IMHO , retail short-term players should never buy too many shares of rights counter especially if counter price was high like LKH.
reason is for sure rights share price will not shoot up atleast for 1 or 2 months after rights issue until some significant news. 
so 1 or 2 months ur money sure get blocked.
could use for investing other counter. 

but quite likely after 3 or 4 months slowly price go back to normal once most of short term players sell their rights.


also no point trying to buy rights share over the counter.it works out to nearly same price as mother share mebbe 1 cent + / - . but then most likely mother share price dip some more after rights, best to buy then.

 

rebeccatann, thanks for your clarification on the calculation. good to know that i am not suffering a big loss :)


just hope LKH price won't dip further...
 

 

rebeccatann: ur calculation is correct as of current. but the rights converted to shares is only available for trading on mid July onwards. by then due to more shares floating the share price may adjust downward to reflect that. so tat poster with 6 lots may incur loss instead of profits assuming he intend to take the rights and convert to share and start trading on those new shares in mid July.

 

This is how i calculate. Pls correct if i m wrong. (nclusive of brokerage fees)

U bought 6 lots @ $2.15         $2.15x6000 = $12945   (U paid $12945 for 6 lots )

U bought 12 lots @ 0.369       $0.369x12000 = $4457 (U paid $4457 for 12 lots)

So all in all, u have 18lots @ an average price of 0.9667.

Current market price is 0.79. If u sell all yr 18lots at this price, u will make a loss of -3,276.69.



But remember , the dividend of $925 per lot have not been included. 6 lots of dividend payable to u is $5550.

After 18% tax, u will get $4551 for yr dividend.



U still make a profit of $4551-$3276.69 = $1274.31

 

As of current, LKH Sp R is trading at 0.390 so say you buy 1 lot you pay 390+brokerage fees. You go and exercise it at ATM at 0.369 so total cost is 390+369+ brokerage fees = 759+brokerage fees.

Mother share is trading at 0.790 so 1 lot is 790+brokerage fees.

So isn't it more worthwhile to buy the rights than the mother share?

 

 

$2.39 x 5000 = $11,950 (invested)

Currently Value = ($0.785 x 10000) + (0.785 x 5000)

  = $11,775

I'm making a loss !!!

 

Investsmart, thanks for response.

but wont the price dips when the right issues are taken out, like the situation when some stock prices drop after it gives out bonus shares etc...

pardon my ignorance,  quite a newbie on investment..
 

 

$2.15 x 6000 = $12,900 (invested)

Currently Value = ($0.785 x 12000) + (0.785 x 6000)

  = $14,130

You still have profit !!!

 

need advice on this counter. holding 6000 shares bought at $2.15,  12,000 right issue offered at $0.369.. not sure if i will incur more loss if i take up the right issue since price already dipped to $0.785... any 'shi fu' can help me here?

thanks in advance!
 

 

my plan is to hold them but seeing it dips make me worry !! what is "BB" ?

 

yes trying my luck with any good company which gives free rights /bonus issues.
but dont think u can expect quick returns from this counter, might still go down.
will have to wait and see at what price BB is ready to give support.  

 

Thanks, trymyluck. u holding this counter ?

 

hi 1234567,
       dip to be expected, yday everyone got the letter from company locking in entitled rights. so people selling the shares they currently own. 
if u a medium-term player, id think best to hold.
LKH turning into more of a property player from a construction player so more chance of upside when next earnings announcement.


 

 

anyone knows why the dip ?

 

oh.. hmmmz, thanks sohguanh.. then its a bit tricky.. will look into it, though i bought some off the market le..

ya, those that know the ans do inform us, thanks lots =)

 

In another forum a poster told me buying the rights off the market does not mean you have the rights share. You must exercise the rights and turn it to a rights share. So the cost is actually TWO components. First component is the rights you bought off the market. Second component is the cost of conversion from rights into a rights share. On top of that since you buy rights off the market you still need to pay brokerage fees. Muz factor ALL the cost in to see worthwhile or not.

Seasoned rights player please correct me if I'm wrong in my understanding. 

 

wanna subscribe for excess rights too , lets huat ya~

 

just to confirm something ya, if i buy the rights from the open market, it will still be converted to ordinary shares on july 11 ya? wanna load up more=)

 

Hi Guys, thanks for the inputs. I missed out mentioning the final dividend in my eariler post.

I plan to use special dividend to pay for the right shares and cash the final dividend. Let's huat ...ya !!

Phoenixhot, I think u can buy the right from the open market ... but I don't know the pro and cron.

  

 

LOL, at 36.9 cents for the rights, please  sell me  the rights entitlement if you do not want to  subscribe.