Posted by reyes430 > 2012-12-27 14:40 | Report Abuse

Hi there, as u mentioned when par value drops, the company can issue the share to others in a lower price? Like how? So meaning to say that, as when a company want to raise more share, there will be adjustment on par value?

Posted by jayrc23 > 2012-12-27 14:53 | Report Abuse

get more info on market terminology and explanations at investopedia.com

Posted by Zul Ilman Muhammad > 2012-12-27 15:11 | Report Abuse

Yap. they can issued at lower price in form of private placement,RCPS, etc. SO the par value would the benchmark of the minimum price for them.

Actually not many company would adjust their par value when they want to raise up the new shares. It depends on how the accounting side might affect the company before and after the reduction of par value.

Posted by reyes430 > 2012-12-27 15:17 | Report Abuse

Ok. Thanks for the info bro zul, much appreciated!

Posted by lotsofmoney > 2012-12-27 15:27 | Report Abuse

What is the lowest Par Value - 1 cent or can be lower ?

Posted by WONG TONG GUAN > 2012-12-27 15:29 | Report Abuse

UOA 0.05 only.

Posted by Zul Ilman Muhammad > 2012-12-27 15:35 | Report Abuse

Most welcome reyes..=)

Posted by Junglestock > 2012-12-27 18:30 | Report Abuse

Thank you Zul, very informative and useful to know for beginners like me. One question, can MAS review their par value again after this?

Posted by Zul Ilman Muhammad > 2012-12-27 23:09 | Report Abuse

yap..of course can..it depends on the management decision.Like PJI before, the reduction of par value was used to write off their debt..might as well for MAS. just need to see the balance sheet to tell the truth.

Posted by lotsofmoney > 2012-12-28 09:37 | Report Abuse

Thanks for the information.

Posted by KC Loh > 2012-12-28 10:14 | Report Abuse

i am not answering on behalf of Zul, but you can try this Tan,

http://mymy.org/counters.php

Posted by Zul Ilman Muhammad > 2012-12-28 11:04 | Report Abuse

Yap Tan..u can see the link KC give u..there got the par value for any counters..

Posted by berid > 2012-12-28 11:12 | Report Abuse

if u using maybank platform, u may find it in counter details..

Posted by KC Loh > 2012-12-28 11:19 | Report Abuse

the forum, from using it, is not up to date as like i3investor.com. on the other hand, you get a lot of details from the past. very good for a quick look-up, IMO :)

Posted by KC Loh > 2012-12-28 11:21 | Report Abuse

and the one i like most, is the website, star, Reuter & Bloomberg links! that makes it up to date for me :)

Posted by Zul Ilman Muhammad > 2012-12-28 11:48 | Report Abuse

yap..usually if u got the online trading platform, then u can search and get the data from there. and because par value did not often change,so usually if u look on your online trading platform is enough already..n if the company want to make adjustment from that, basically they will tell how much the par value before and the proposed reduction 1..

Posted by tonylim > 2012-12-28 15:25 | Report Abuse

Tan,
Posted by Tan Kian Wei > Dec 28, 2012 02:56 PM | Report Abuse

when the par value will be change? right issue? split? bonus share?

will company issue new share when the warrant holder convert warrant to share? and will this exercise affect the par value?
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Take par value as if you started a biz with say RM 10k even though the authorised capital might be RM200,000, so RM190,000 is unissued or not yet paid up. So u decided to par the value of each paid up shares at RM1-00 per share which gives you 10,000 shares. So that small amounts of shares can be distributed or sold.

Now if the biz has a good value, increase ten times, the value of your shares is now worth RM10 each, now your total share holdings is worth RM100,000.

To improve liquidity of your shares, you now split by changing par to 50 sen by creating or issue another 10,000 paid up shares to make up 20,000 shares. So technically your shares is now worth RM5 each but your holdings increase 2 times, it 20,000 shares. Net worth still remain the same.

At the same time, you give bonus shares by increasing your share capital base, there is no change in net worth of your company but now your share holdings increase even more at 50 sen par. But where did we get money to pay up the increase in shares? We take it from "distributable" reserves and retained earnings or operating profits not distributed by way of dividends. There are laws in the company act and other governing instruments to define what is distributable.

I must warn you I am quite outdated now.

For rights issue, there is also no change in par value but because shareholders who subscribe to rights give the company money to subscribe more shares, there is a corresponding increase in net worth but adjusted by the additional amounts of the shares issued (or paid up capital) in the company. For rights issues to be attractive, it has to be reasonably priced.

Yes company will issue new shares to warrant holders as company undertook to give new shares if you are able to pay what is required in the deed poll.

No this exercise will not affect par value.

Posted by tonylim > 2012-12-28 15:29 | Report Abuse

Tan, I am surprised you seems to be bought so much shares and still struggling to understand par value.

I faced the same problem, a lot of dunggu company secretaries/legal officers dont even bother to state par value in their announcements of dividend payments. So be careful when dividends are announced in "xx% per share" because you need to multiply by the par value to arrive at the absolute rm and sen per shares of dividends.

If it is declared as "xx sen per share" then it is absolute meaning you receive the same amount of dividends per share irrespective of par value.

Posted by talk2pkc > 2012-12-28 17:34 | Report Abuse

That's why EPF is dumping in BIG volume , just like "buffalo" doing its business ha ha

Posted by talk2pkc > 2012-12-28 17:52 | Report Abuse

Tan ????????????

Posted by talk2pkc > 2012-12-28 19:25 | Report Abuse

Ahhhh , Tan , obviously u r implying it have no direct or indirect at all as one of the factors ??? Oh well , that's yr privilege & yr opinion that I respectfully noted , ma ..... LOL

Posted by andy118 > 2012-12-28 20:12 | Report Abuse

Sorry I still do not understand why the par value is important.
In MAS case, we already knows that the co. had been making losses and now it decides to make it more realistic by writing them off via a reduction of par value. I think it goes down because of the rights issue as the fund managers etc does not want to throw good money after bad

If a company wants to issue shares below par, they can easily do the above or in KNM's case credit the balance from the reserves, share premium a/c etc.

If no par value, then all company have to declare their dividends in sens rather some in percentage and some in sens.
Just my 1/2 sen as I may have left out something

Posted by Hustle > 2012-12-28 20:40 | Report Abuse

Honestly said Par Value is just a trick to cover investor eyes.When we invest on some counter,what important is how much the company can earn and willing to pay dividend to the investor.If we emphasis on Par Value I'm believe that nobody will willing to invest on Genting share anymore,since it just worth 0.10 and Uoadev only worth 0.05.

Posted by Zul Ilman Muhammad > 2012-12-28 23:04 | Report Abuse

Just updated to make it clearer. Correct me if im wrong..ty..=)

Posted by KC Loh > 2012-12-28 23:22 | Report Abuse

Par value has legal implications. Chiefly, its because the corporation is a legal entity and its whole "value" rest on the original number of shares authorised as well as paid up and what is the "value" of each shares! What management does with it subsequently, as tonylim explained, is either to increase liquidity or not. Imagine you want to split or merged back the shares, you have to inform both the court and public what is the "value" of the shares again to satisfy the law!

In some sense, it does not really matter to an investor what the par value is if its basically just for buying and selling as tan rightly stated. Price becomes the all important factor to many! But it helps to know what the management is doing and especially when it comes to % dividend of the par value!

Posted by KC Loh > 2012-12-28 23:31 | Report Abuse

The implication of "value" can be seen even more clearly if you are dealing in a private limited company. Generally, banks will have a hard time approving a RM2 company of millions of RM worth, because of this paid-up "valuation". I understand this is Malaysia, and strange things happen, but by definition, that's the reason why the requirements of the law must be satisfied and the banks can reject the application of the loan even if backed up by guarantee from a millionaire director/stakeholder! The corporation can be seen as not credit worthy because it is only worth RM2 in the eyes of the law!

Posted by KC Loh > 2012-12-29 00:00 | Report Abuse

Earning diluted yes. But a company that issues new shares will still have to issue shares on the same par value, unless consent is obtaind fom the court that par value reduced! Remember, the corporation is a legal entity!

Posted by tonylim > 2012-12-29 00:23 | Report Abuse

Earnings is diluted yes, because it has got nothing to do with how much a company is worth. Earnings is simply way of telling you how much a company earns in a particular reporting period eg Quarterly report and annual reports. Tan, do you know EPS or earnings per share? It is the company's net profit divided by the NUMBER OF SHARES NOT divided by the par value of paid up shares in the company. So when you read 7 sen EPS it means net profit divided by the number of paid up shares. Therefore whether UOA or genting which par values are 5 sen and genting par value 10 sen, its earnings is still 7 sen of net profits per SHARE irrespective of par value.

Posted by tonylim > 2012-12-29 00:28 | Report Abuse

Ok, now MAS has reported hugh losses which is either the company owe money to bankers and suppliers which needs to be paid, how do you think the losses can be erased from the books? Keeping the losses in the books will cause the company to close down because bankers will come after their assets, and if not enough to pay the bankers, they will sue you till you are bankrupt.

Tan Kian Wei, how will you do to make sure bankers and suppliers with continue supporting MAS to continue its business?