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Sell the rights units entitlement on the counter "CapitaComm R" only if one has no intention to subscribe for the rights units. This is the compensation that a company gives to it's shareholders to renounce their rights (ie. sell their rights entitlement) since shareholders are effected by dilution effect of the rights units. At least shareholders who do not want to subscribe to rights units and subsequently convert to main units can get back some monetary compensation through selling off their rights entitlement during this "nil-paid" rights trading period (10 June to 18 June).
It is always a difficult situation for a shareholder when faced with a rights issue. Rights issue dilutes his share in the company's earnings (earnings per share and dividends per share are reduced). So, a shareholder has to decide carefully whether to increase his holdings (subscribe to rights shares and later convert to main shares to increase his total number of shares so as to maintain his stake in the company though with a larger invested capital now) or to sell off his existing holdings entirely. It depends on how he views the future profitability in the company. If the capital raised from the rights issue is put to good use, then a shareholder can be rewarded eventually with further increased earnings from the company through the years. If capital raised from rights issue is not used properly, then the shareholder is punished double times (first time by the dilution effect of the increased number of shares through rights issue and next by a lousy company that did not use the capital raised properly to grow it's business and increase it's earnings per share and dividends per share for their shareholders).
<Decide carefully based on investigating the economics of the company when faced with rights issue to determine whether one should invest more money to buy the rights issue and later convert to common shares. Decide carefully whether there is another better investment to invest the same amount of money into rather than be tempted by the lower price of rights issue to buy it. Don't be blinded by cheaper price alone. It is the company's fundamentals that will eventually determine an investor's investment returns.>
E-war ( Date: 09-Jun-2009 09:14) Posted:
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E-war ( Date: 09-Jun-2009 19:01) Posted:
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CapitaComm REmm that an attractive entry. Good to wait if it will come true. But definately not buying any above 0.90 now. Too expensive....
Anyway buy with yr own judgement. Believe all share buyer in this forum do yr own study b4 going in fr any share.
erictkw ( Date: 08-Jun-2009 09:22) Posted:
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The art of buying and selling is that an investor is always concerned and always not concerned with the stock price. He is always concerned because he wants to only buy at a bargain stock price much below the estimated intrinsic value of a company and sell at a much overvalued price above intrinsic value of company to others people. Similarly, he is always not concerned because he knows stock prices fluctuate and if he has bought at a good price, he is only patiently waiting for another best price to buy somemore or to sell off in future.
<Make full use of Mr Market's mood swings (changes in prices) to an investor's advantage. Buy heavily when Mr Market is most pessimistic and sell heavily to him when he is most optimistic. In between, wait patiently for Mr Market's moods to reach extreme pessimism or extreme optimism.>
The announced NAV for CapitaCom trust is around $1.51 per unit after effects of the rights issue. So, I think any price below this NAV is suitable to enter. Of course, the lower the price the better so that you have a larger safety margin in case the price drops further. The distribution per unit (DPU) for this year should be lower after factoring in the dilution effects of the rights units. Best price to enter is of course at the rights units price ($0.59 per unit) so that you can get a high distribution yield (estimated close to 10%). Any price higher than $0.59 per unit may mean one gets much lesser distribution yield than 10%.
So, there is no definite price to enter. Anything below current price of $0.94 is suitable to enter. The lower the price the better. If you are unsure whether the price will drop further in the near term, then don't enter. Wait on the sideline. There is nothing wrong with waiting for a suitable price (aka waiting for the perfect pitch). Even if the price does not go down and you miss buying in, then so be it. Only buy when you know the odds of winning is highly in favour of you (chances of price decreasing a lot is minimal but chances of price increasing a lot in future is maximal). If you don't want to wait and think this company is already very worth investing your hard-earned money, then why not just buy in only a little bit if you are unsure whether the price will drop further in future. When the price really drops further, then you may increase your buying as long as you know this company is still very worth investing your hard-earned money.
As long as you keep in mind the lower the price you enter, the higher the rate of returns on your investment dollars eventually, then you will buy in rationally only at opportunate moments and not risk your hard-earned money thinking of wanting to make a fast buck out of the changing stock price.
<Always wait patiently for a stock price much lower than intrinsic value of the company when buying. The lower the stock price the better the rate of returns on investments. There is no incentive for rapid action in the stock market. Buy only when the odds of winning are very high. When the best moment comes, buy heavily. A fisherman's patient mindset is most suitable for playing the stock market since most of the time is patient time spent waiting for the right moment to strike (only buy and sell at the best moments with highest probability of winning; during most other time, the fisherman investor is 'involved' in waiting patiently for the best deal to come).>
erictkw ( Date: 08-Jun-2009 09:22) Posted:
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Alligator ( Date: 03-Jun-2009 09:02) Posted:
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