Practice Makes Perfect
KrisAssets - What Happen If You Bought 1,000 units of KrisAssets Shares Today @ RM 9.25?
Chin Kok Tan
Publish date: Sat, 22 Sep 2012, 01:38 AM
Chin Kok Tan
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CK>> Based on the circular to shareholder documents, dated 5-June-2012 (outdated information as it is using indicative reference price RM1.00 for IGB REIT share), if you are holding 1,000 units of KrisAssets share, you would be entitled to:
Formula:
1,000 KrisAsset = 5,240 IGB REIT + RM2,432
Assuming IGB REIT share price is able to maintain at the level of RM1.35 from now until 19/10/12 (higher would be better, but if lower, don't blame me).
1,000 KrisAsset = 5,240 (RM1.35) + RM2.43 = RM7,074 + RM 2,432 = RM9,506
As per title of this article, if you bought 1,000 units KrisAssets today @ RM9.25, means your initial investment capital is RM9,250.
Once 19/10/12, immediate sell your 5,240 units of IGB REIT @ RM1.35 (if the price still maintain), you get back RM7,074.
Since you get back RM7,074, your investment is now left RM9,250-RM7,074=RM2,176.
Question >> Would you continue hold KrisAssets (you already get back RM7,074, only left investment capital of RM2,176), keep holding and wait for around 6-7 months, to get back capital reduction and repayment amount, which is RM2,432???
Invest RM 2,176 and get back RM2,432 in 6-7 months time, this deal almost guarantee as KrisAssets definitely will be de-listed. Which is equivalent to 11.76% return in 6-7 months, or also equivalent to annualised return of 24%!!!!
Fact>> Does it sounds interesting??? Not yet... All the above calculation is using IGB REIT illustrative reference price of RM1.00, as written in document dated 5-June-2012.
But in fact, KrisAssets is offering RM1.25 per unit of IGB REIT share in the proposed offer for sale. It means KrisAssets will be receiving more $$$ generated from the sale of IGB REIT shares in IPO. Another way to say that, more $$$ will be distributed as cash distribution in 6-7 months later.
Based on my calculation, the final formula should look like:
1,000 KrisAsset = 5,240 IGB REIT + RM2,754 (in stead of RM 2,432. I have no gut to write this sentence at bigger font, just worry I did a wrong calculation and you guys blame me later...)
Conclusion >> GOOD BUY? I don't know, confusing... I hope my calculation is correct. Let's wait and see...
Formula:
1,000 KrisAsset = 5,240 IGB REIT + RM2,432
Assuming IGB REIT share price is able to maintain at the level of RM1.35 from now until 19/10/12 (higher would be better, but if lower, don't blame me).
1,000 KrisAsset = 5,240 (RM1.35) + RM2.43 = RM7,074 + RM 2,432 = RM9,506
As per title of this article, if you bought 1,000 units KrisAssets today @ RM9.25, means your initial investment capital is RM9,250.
Once 19/10/12, immediate sell your 5,240 units of IGB REIT @ RM1.35 (if the price still maintain), you get back RM7,074.
Since you get back RM7,074, your investment is now left RM9,250-RM7,074=RM2,176.
Question >> Would you continue hold KrisAssets (you already get back RM7,074, only left investment capital of RM2,176), keep holding and wait for around 6-7 months, to get back capital reduction and repayment amount, which is RM2,432???
Invest RM 2,176 and get back RM2,432 in 6-7 months time, this deal almost guarantee as KrisAssets definitely will be de-listed. Which is equivalent to 11.76% return in 6-7 months, or also equivalent to annualised return of 24%!!!!
Fact>> Does it sounds interesting??? Not yet... All the above calculation is using IGB REIT illustrative reference price of RM1.00, as written in document dated 5-June-2012.
But in fact, KrisAssets is offering RM1.25 per unit of IGB REIT share in the proposed offer for sale. It means KrisAssets will be receiving more $$$ generated from the sale of IGB REIT shares in IPO. Another way to say that, more $$$ will be distributed as cash distribution in 6-7 months later.
Based on my calculation, the final formula should look like:
1,000 KrisAsset = 5,240 IGB REIT + RM2,754 (in stead of RM 2,432. I have no gut to write this sentence at bigger font, just worry I did a wrong calculation and you guys blame me later...)
Conclusion >> GOOD BUY? I don't know, confusing... I hope my calculation is correct. Let's wait and see...
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Discussions
1 person likes this. Showing 7 of 7 comments
Yes, after the Ex-date, the share price will be adjusted accordingly. Perhaps should be around RM2.00++. But not so sure on how to calculate this Ex-date price especially on this corporate exercise...
Perhaps some experts here may advice.
2012-09-22 12:37
1000 krisasset = 5240 IGBreits + RM2.75 at ex date 19/10/2012.
keep the igbreits - dividend around 6cents at upcoming financial quarter.
2012-09-24 08:04
Hi guys, may i know where do you get the RM 2.43 / 2.75 ? what money is that ? please explain .. cheers.
2012-09-24 23:08
If I am correct 5240 @ 1.38 today will be RM7,231.00 + RM2753 cash distribution works out to RM9,984.00. The counter is cheap based on the above illustration.
2012-09-25 20:28
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This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
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Hi Tan,
after the ex-date, will the mother share reduce its value?i think it would affected the share price too. please share your opinion on this.
2012-09-22 08:55