If I buy a 10000 warrant call, then I pay RM650? Then ratio of 10 means I get only 1000 mother shares?
It would means I get RM 4500 for the RM650 I paid?
Hey wait, it makes no sense....

No, you will not get any mother share.
They will calculate the 5 days average price of SIMEPLT,
Let say the average is 5.1234,
Then (5.1234-4.50)/10 = 0.06234,
Then 10000*0.06234=623.40,
A few days after Expiry, your account will be credited with RM623.40.

If the average price is lower then 4.50, then you will not receive any money.

Investformilkmoney

Input:
1) Dividend Yield = 0%, as there will be no dividend from now to Expiry.
2) Historical Volatility, 35% to 42%, I use 40%
3) Interest Rate, I use 4%.
4) Expiry, I use the 3rd settlement day, 24th June 2022.

My calculation show that the fair value for SIMEPLT-C2 is 0.0597.

May be you can read my post, SUNWAY-WB.

Investformilkmoney

1) They calculate the Historical Volatility (HV), let say it is 20%,
2) Apply a factor of, say for example 1.25, it is 20%*1.25=25%,
3) This 25% become Implied Volatility (IV)
4) Input 25% to Fair Value Calculator, and let say they get the Fair Value is 60 sen,
5) Then they set the ratio as 4, the issue price will be 60 sen / 4 = 15 sen.
6) After listing, they set market making, Buy at 15.0 sen and Sell at 15.5 sen,
7) The Spread 0.5 sen, that is 3.3%, and is their profit,
8) If the price go down to 10 sen, then 0.5 / 10, that is 5%, higher profit,
9) If the price go up, they can set buy / sell spread to 1.0 sen to maintain the profit margin,
10) But the problem is when the price go up further, let say to 50 sen,
11) They can set market making buy 50.0 and sell 52 sen,
12) But I can jump Q to buy 50.5 sen , or the person who have that CW can jump Q to sell at 51.5,
13) Then Issuer can not maintain their profit.

My understanding of how the IBs manage call warrants business, take example of KLK-C14.
1) Let say Monday, some one buy 300,000 KLK-C14 from Issuer,
2) As the No of KLK-C14 not held by Issuer increase by 300,000, Issuer will immediately go and buy 20000 KLK.
3) 10 minutes later, if another guy sell 150,000 KLK-C14 to Issuer, the Issuer will go and sell 10000 KLK.
4) This will continue until before the 5 settlement days.
5) Then the Issuer will dispose slowly their mother share holding in that 5 settlement days.
6) Sure win for IBs, no need to manipulate the market.

https://www.youtube.com/watch?v=zNJ8K0xiqLg

Watch the above explanation.

Calvin,
With what basis did you come out with 7m mother share vs 200m CW?

Look at 27th May Trading,
The most active traded call warrants for KLK was KLK-C14.
Go to bursamalaysia.com and read CIMB monthly issuers's announcement for the month of April.
Total Issue Size of KLK-C14 is 150,000,000,
However, No. of KLK-C14 not held by CIMB on End April (meaning out in the market) was only 661,200 units.
The conversion ratio of KLK-C14 is 15, meaning 661200 / 15 = 44080 mother share.
This 44080 units is chicken feed compare to KLK volume 1,778,000 on Friday.
I do not think it is worth for CIMB to manipulate.

One guy from one Investment Bank told me that trading volume is one of the criteria set by Bursa (or SC?).
They can not get approval to issue structured warrant on mother share which are not actively traded.

How that Dividend Yield 3% and Interest Rate 4% affect the Fair Value?
1) The Calculation would expect 4% IRR (weighted average) for investing in SUNWAY mother share.
2) 3% from Dividend and 1% (4% - 3%) from Capital Gain.
3) Calculation is base on both SUNWAY and SUNWAY-WB should have the same weighted average IRR of 4%.
4) Therefore, SUNWAY-WB Fair Value at Expiry will be discounted by 4% p.a. back to Today's Fair Value.
5) This is how the Fair Value RM0.415 is calculated.

The Issuers do not want the mother shares to go down.
In fact they want the mother share to go up, the higher the better.

They are not gambler, they want sure win.
The time they sell call warrants, there are mother shares in their hand to hedge against it.

Please ask some one who has worked in Investment Banks.

Why not look at SUNWAY-WB?

https://klse.i3investor.com/web/blog/detail/gambler/2022-05-28-story-h1624104997-SUNWAY_WB

The actual Expiry is 03.10.2024.
However, most investors do not like the troublesome of physical conversion.
So, in most cases the company warrants will trade at no premium when it come near to Expiry.
Therefore I assume the Expiry is 3 months earlier at 03.07.2024.

The exercise price: A fixed annual step-down of RM0.07 per year on each of the anniversary dates
1) From 04.10.2021 to 03.10.2022, = RM1.49
2) From 04.10.2022 to 03.10.2023, = RM1.42
3) From 04.10.2023 to 03.10.2024, = RM1.35

When an unitholder asked TTB in AGM why the fund bought KLK instead of BKAWAN, his answer was "Exit Strategy", meaning can dispose faster lor.

I read from Investopidea, to me the reasons given to justify conglomerate discount are all rubbish.

Furthermore, conglomerate discount is not applicable to BKAWAN/KLK lor, because BKAWAN's other profit is only 0.1752, only 6% of its total profit mah.

BKAWAN is KLK, KLK is BKAWAN lor.

Don't like this BKAWAN/KLK example, then tell me why SIMEPLT/KLK/IOICORPs' PE is relatively much higher than those smaller size plantation companies.

COMPANY SIZE and TRADING VOLUME VERY MUCH MATTER.

When you own 1 BKAWAN, indirectly you get 1*B = 1.3*KLK + X,
where X is BKAWAN's other small business.

Look at their last financial year EPS,
BKAWAN's EPS=RM2.8961, KLK's EPS=RM2.0930,

Fit into the above 1*B = 1.3* KLK + X,
X = 2.8961 - 1.3 * 2.0930 = 0.1752,
Meaning BKAWAN other small business also contribute small profit.

Now, base on last Friday Closing, B = RM29.12 and K = RM29.46.

Look at FY2021 PE Ratio,
BKAWAN's PE = 29.12 / 2.8961 = 10.01 times,
KLK's PE = 29.46 / 2.0930 = 14.08 times,

Look at FY2021 Dividend Yield,
BKAWAN's DY = 1.10 / 29.12 = 3.78%,
KLK's DY = 1.00 / 29.46 = 3.39%,

Why fund managers (EPF, ASB etc) invest in KLK but not BKAWAN?
The answer is COMPANY SIZE and TRADING VOLUME VERY MUCH MATTER.

Aiyo, you look at my chart,
Early 2008, the FCPO was 4000, one year later it drop to 1500,
Then Early 2011, went up to almost 4000,
Then 2015 and 2019, went down to 2000,
So, anything can happen lor.

I repeat again and again,
My calculation is with assumption that the cost remain the same for the next 5 years, and the 2761 is also net of inflation. It make calculation easier.

If I were to consider inflation, then both the cost and the 10 years average 2761 also need to adjust.

Still don't understand meh?
Assume cost remain the same, that is why I use 10 years average which is net of inflation.

If I were to consider inflation of x% per year, then the 2761 need to multiply with (1+x%) ^5.
Then how lei, use what x%?
You and I both also don't know how much is x%.

If you don't know how much x%, how do you know 4200 is sustainable or not?

Aiya, in estimation, we should assume no inflation.
What if 5 years later the MYR/USD=4.3*2=4.6, then your 4200 become too low liao, maybe BKAWAN also no profit liao.
But in my calculation, the price 2761*2=5522, still have profit lor.

We can't predict inflation.
In my estimation, the cost remain the same for the next 5 years.
In another word, the 2761 is net of inflation.
Meaning if 5 years later the cost is 500 higher than today's cost, then the FCPO will be 2761+500=3261.

Aiya, you don't read properly or you don't understand?
I said fair PE at the furthest month which is 5 years later, when the FCPO is almost at the 10 years average=2761.

I ask you,
a) 15 PE when FCPO at 2761, or
b) 11 PE when FCPO at 4200.
Which one will give lower/safer valuation for BKAWAN.

Seriously, I don't think FCPO will stay long at 4200.

The fair PE ratio I apply:
1) 20 for KLK, big and very well managed company.
2) 15 for BKAWAN, a better choice than KLK, can keep until we die, but funds don't like small trading volume.
3) 25 for SIMEPLT, big freehold land in Peninsula, owned by ASB.
4) 15 for SWKPLNT, well managed and good dividend, improvement still ongoing since 2018.
5) 15 for TAANN, well managed and good dividend.

The discount rate that I use for Present Value is 8%. I think it is already very conservative.

The most active traded FCPO is 2 or 3 months from current month.
Example, on 15th April, most active traded month is June, on 16th April, most active traded month is July.
If the companies (big companies) sell their CPO to the most active month prices,
Then this coming Q1-2022 result will not be better than Q4-2021, but the next Q2-2022 will be very good, much better than Q4-2021 and Q1-2022.

However, most small companies sell at spot price, which I do not monitor, so I dun know.

Should change 'M.Cap/Ha' to '(M.Cap+T.Debt-C.Asset)/Ha'.
If your dun know the management very well, dun buy those small companies that pay very little dividend.

8888_
FGV is a special case, most of the land owned by Felda, FGV has to pay fixed amount and profit sharing to Felda.

Good Dividend 5.9 sen.
Up up up.

If someone like DickyMe is good in predicting future CPO prices, my congratulation to him.
Just short FCPO and he will be making tons of money.

The only sector that I would invest heavily in Bursa Malaysia for long term is plantation.
And may be a little bit in property (township) developer, as I see inflation and ringgit depreciation.
For banks, we should invest in those countries that the currency is stronger, e.g. Singapore.

We should not invest in any plantation company base on their latest EPS.

We should check their past EPS record at various CPO prices then, use spreadsheet to predict their EPS if the CPO prices going down to, say 10 years average.

For your information, SWKPLNT should be making EPS 21 sen a year if the CPO going down to the 10 years average, or PE would be only 13 times.

RM1.86*40,100,000units/758Ha=RM98,398/Ha, Not Cheap.

Hope you will not regret.

KLK boss asked his own staffs to buy BKAWAN instead of KLK.
The reason is very simple.

ahbah

I sold in batches when it was climbing up, overall average was 4.20.

Bad result.
Lucky I sold all.
Will decide to buy back when the price drop below RM4.00.

CharlesT,

The Equity Level chart that shown in this post was from Aug 2010 and onward.
Because the Q.Results before that showed the Book Value in the Balance Sheet.
That make a bit more work to compute the Equity Level.
However, last night I spent some times to complete it.

I found that the overall average Equity Level from Nov 2005 to Nov 2021 is 53.7%.
With the 20 sen special Dividend, the Equity Level will be around 65% by Feb 2022.
Unless ICAP sell more than buy during current Quarter.

I also do not want to keep ICAP for Long.
Just bought it because the Price / NAV ratio is very Low.

https://klse.i3investor.com/blogs/gambler/2022-02-13-story-h1598456061-Right_Time_to_Buy_ICAP.jsp

Already bought some ICAP.

In June 2020 and November 2021, HAPSENG offered to buy 1175.8ha (552ha + 623.8ha) from HSPLANT for 160.9m (76.0m + 84.9m), or RM136,843/ha. It is much higher than the market price of 80000/ha. I think it is because the estates are at good location and are potential for property development

If HAPSENG really want to privatize HSPLANT, it should not have made the above offers. Just need to add another 440m, make up to a total of 600m, to offer RM3.00 /share to privatize HSPLANT.

The EV/ha for HSPLANT estates:
1) Market Price RM2.05, EV = 47000/ha, very very cheap.
2) If to offer RM2.50/share, EV = 57000/ha, very cheap.
3) If to offer RM3.00/share, EV = 69000/ha, still cheap.
4) If to offer RM3.50/share, EV = 80000/ha, fair price.

Recent deals:
1) KMLOONG bought Sabah oil palm estate at 80000/ha.
2) KLK bought IJMPLNT, the valuation were, Sabah estate at 80000/ha and Indonesia estate at 40000/ha.

My guess is:
HAPSENG may be intend to dispose off the plantation business, but wants to keep the above 1175.8ha land for property development.

What I know about typical IPP contract in Malaysia:
1) Contract 20 - 25 years.
2) Buyer to decide when to connect or not to the power grid.
3) If connected, Seller will get more revenue and profit.
4) If not connected, Seller to pay a fixed amount provided the plant is ready to be connected, Seller revenue and profit will be minimum.
5) End of contract, two alternatives, both Buyer and Seller can agree to extend with new rate, or Buyer take over and pay an amount as per the contract.
6) Fuel is cost plus basis.

So my concern is during the long 20+/- years:
1) If there is many new local IPP in future, foreign IPP will be the last one to be connected, is there any provision in the Contract to protect foreign IPP?

140+/- trading days before effective Expiry,
Volatility for the past 140 trading days = 52.5%, input this to Calculator.

Valid for 29/12/2021 only, Fair Value of C2C:

1) TOPGLOV=2.30, C2C=0.100
2) TOPGLOV=2.32, C2C=0.104
3) TOPGLOV=2.34, C2C=0.107
4) TOPGLOV=2.36, C2C=0.111
5) TOPGLOV=2.38, C2C=0.115
6) TOPGLOV=2.40, C2C=0.119
7) TOPGLOV=2.42, C2C=0.122
8) TOPGLOV=2.44, C2C=0.126
9) TOPGLOV=2.46, C2C=0.130
10) TOPGLOV=2.48, C2C=0.134
11) TOPGLOV=2.50, C2C=0.138

Valid for 28/12/2021 only, Fair Value of C2C:

1) TOPGLOV=2.30, C2C=0.100
2) TOPGLOV=2.32, C2C=0.104
3) TOPGLOV=2.34, C2C=0.107
4) TOPGLOV=2.36, C2C=0.111
5) TOPGLOV=2.38, C2C=0.115
6) TOPGLOV=2.40, C2C=0.118

True, it is very likely to end-up TOTAL LOSS,
However, there is "Not So Likely" we will make more than 100% Profit.
Average out, the fair Value was RM0.08 yesterday.

Of course, right now the Fair Value is RM0.1166 when mother share is RM2.40.

Sold all at RM0.09,
Aiya, sold too early.

https://klse.i3investor.com/blogs/gambler/2021-12-26-story-h1596407327-TOPGLOV_C2C.jsp

https://klse.i3investor.com/blogs/gambler/2021-12-10-story-h1595534584-TOPGLOV_Time_to_Look_at_its_Structured_Warrants.jsp

The Volatility is picking up, time to trade its structured warrants, both call and put.

https://klse.i3investor.com/blogs/gambler/2021-12-05-story-h1594819607-SIMEPLT_Valuation_of_its_Plantation_Estate.jsp

The true value of SIMEPLT.

Sorry to say, I think KYY should get service of experts to help in investment.

What is the point of calculating PE based on past 2Q plus next 2Q only?

What if the company make very little profit after that?

KYY should estimate / predict the company next 5 (at least) years profit.

I give an example for a company XYZ, apply a discounted rate of 8%.

1) 2022 EPS : 0.25, pv = 0.25/1.08 = 0.23
2) 2023 EPS : 0.20, pv = 0.20/1.08^2 = 0.17
3) 2024 EPS : 0.15, pv = 0.15/1.08^3 = 0.12
4) 2025 EPS : 0.10, pv = 0.10/1.08^4 = 0.07
5) 2026 EPS : 0.05, pv = 0.05/1.08^5 = 0.03
6) 2026 price at PE of 10, pv = 0.05*10/1.08^5 = 0.34

Sum up the above 6 items, fair value = 0.23+0.17+0.12+.07+0.03+0.34 = 0.96

Wow... 20 sen dividend.

I think esg issue is not so applicable to small companies, as local investor like us would not care, we care for the PE and DY only.

Those big foreign funds who care for esg will not invest in small companies anyway.

I estimate TAANN eps should be around RM0.20.

The company need cash for some reason, so they did PP.
Now you ask them to buy back, where to get cash again for the same reason?
To PP again at even cheaper price?

What you said is true and correct,
I checked with my former colleague who is from Sibu,
TAANN is relatively clean and honest,

Those who have friends from Sibu, please ask them.

I keep both SWKPLNT and TAANN,
Monitor their price ratio,
Now it is 2.55 / 3.15 = 0.81,

And adjust my SWKPLNT / TAANN portfolio ratio from time to time.

If you are quite sure the CPO price will drop sooner or later, why not just short FCPO?