This stock is intentionally and artifcifially pushed up for people to subscribe to the rights issue. No surprise. So chances are, after the payment for the rights, the mother share will drop back to through. Not worth the risk.
Investors that want to go through this exercise should look at E&O. You don't have to pay single cent but you get free warrants plus a bonus issue. This is the real reward for shareholders.
It is unfair to say tat. Insas does has its value. It is one of the cheapest (fulfilling Graham NNWC) stocks in KLSE. Besides, it has the highest ROE among all the Graham NNWC counters. One might wander why on earth a company tat can utilize its assets efficiently can be traded tat cheap? If you look at all those Graham NNWC stocks, all have non performing assets (low ROE).
Please read CAREFULLY the Bursa annoucement on INSAS as below :
RENOUNCEABLE RIGHTS ISSUE OF UP TO 138,666,727 REDEEMABLE PREFERENCE SHARES OF RM0.01 EACH (“RPS”) IN INSAS BERHAD (“INSAS”) TOGETHER WITH UP TO 277,333,454 FREE DETACHABLE WARRANTS (“WARRANTS”) ON THE BASIS OF ONE (1) RPS TOGETHER WITH TWO (2) WARRANTS FOR EVERY FIVE (5) EXISTING ORDINARY SHARES OF RM1.00 EACH HELD IN INSAS, SUBSCRIBED AT 5.00 P.M. ON 27 JANUARY 2015 AT AN ISSUE PRICE OF RM1.00 PER RPS PAYABLE IN FULL UPON ACCEPTANCE (“RIGHTS ISSUE WITH WARRANTS”)
This Dato Thong banyak pandai, RM0.01 RPS dia jual sama shareholders at RM1.00! Wah ini better than REVENUES from Mountains of Deals lor, dia ingat shareholders are C2 PID investors arrh ?
RPS dia mahu redeem back berapa ? At PAR or at COST ? What is the interest on the RPS to be paid out to shareholders arrh per annum ?
Hmmm....prospectus is very detail but some people refuse to read and starts calling name.
Actually the RPS is more of borrowing money from the shareholders. You pay RM1 for the RPS, you get 4sen dividend annually. At the end of 5yrs, you get back the RM1. In addition you get 2 free warrant to cover the future value lose of your RM1. If you have the warrant and also the RPS, you can exercise your warrant (convert to mother) without paying the RM1 exercise price. So you basically nothing to lose unless the Insas share price goes zero....lol!
Posted by oregami > Jan 14, 2015 01:18 PM | Report Abuse
It is unfair to say tat. Insas does has its value. It is one of the cheapest (fulfilling Graham NNWC) stocks in KLSE. Besides, it has the highest ROE among all the Graham NNWC counters. One might wander why on earth a company tat can utilize its assets efficiently can be traded tat cheap? If you look at all those Graham NNWC stocks, all have non performing assets (low ROE).
Posted by imoogi99 > Jan 14, 2015 04:24 PM | Report Abuse
Hmmm....prospectus is very detail but some people refuse to read and starts calling name.
Actually the RPS is more of borrowing money from the shareholders. You pay RM1 for the RPS, you get 4sen dividend annually. At the end of 5yrs, you get back the RM1. In addition you get 2 free warrant to cover the future value lose of your RM1. If you have the warrant and also the RPS, you can exercise your warrant (convert to mother) without paying the RM1 exercise price. So you basically nothing to lose unless the Insas share price goes zero....lol!
Posted by Andre Kua > Jan 14, 2015 04:50 PM | Report Abuse
Kcchongz, are you sure no need to up RM1 to convert to mother share? Where you find such info? No need pay then Insas should be RM2 now. LoL...
imoogi99 is right I think. You can use your one RPS to convert one warrant to one mother share, not two warrants to two mother shares. The other warrant you can use another RPS or RM1.00 cash to convert.
Posted by Johnnys > Jan 14, 2015 05:05 PM | Report Abuse KCchongz, 5 for 1 PRS and free 2 warrant, mean I need buy 1 more PRS from market to convert 2 warrant for 2 mother share?
You are right. Or you no need to buy another RPS. Just use another RM1. The RPS acts like a bond. Itself can't be converted to mother share, but can be used as cash to convert the warrant to mother share. imoogi99 explained it well.
Posted by imoogi99 > Jan 14, 2015 05:08 PM | Report Abuse
posted by murali > Jan 14, 2015 05:16 PM | Report Abuse Read carefully,the warrant refers to rps.......not the actual insas warrant
Murali,
RPS stands for Redeemable preference share. It is a preference share, redeemable by the company. It is not a warrant.
Preference shares have the right to get interest before the common shareholders get. And it has no voting right. And in this case Insas RPS has no other claim over the company except the dividend, or interest.
ya ! I hope every insas investor can earn money for longterm . hopefully it back to 1.25 or upper .. because this counter is worth to keep for longterm .unless mr thok fool us this I dono .. I will subscribe this rps .. next trend is technology work .. insas holding inari 35% shares .. should be ok .. somemore syf n hohup .. good luck to everyone in 2015. wish everyone pocket full with insas . we look forward with insas 1.50 base on nta 1.80
Posted by Johnnys > Jan 14, 2015 05:35 PM | Report Abuse Than How much it will be adjusted for mother share?
Sum of pre = Sum of post
Sum of pre = just mother share Sum of post = mother share + warrant
The above relates to the "value" of the stock, not the price, in my opinion. This is because "value is what you get, and price is what you pay"
Price depends on market forces. In general value = price, but not necessary all the time.
So post value = mother share + warrant
Warrant price is related to the mother share using the option pricing. With some iterations, you get a post sum of parts of mother + warrant which theoretically equals to mother pre.
dilution only occurs IF and WHEN a warrant is converted NOT on warrants being issued. the potential of warrants being converted may or may not affect sentiment but it is only one component of such sentiment. if stock is undervalued already and if prospects look bright and growth is expected warrants being issued will probably not affect the overall positive sentiment. if you only own the mother and are a trader maybe you need to ponder and wonder but if you are an investor planning to hold both the warrants and mother, you can't lose.
gweilo. kcchong has clearly stated that sum of pre = sum of post: mother share value before corporate ex = mother share value after corporate ex + warrants
If no dillution (mother share value before ex = mother share value after ex) then warrants worth nothing. Illogical, right? There'll be dillution but the dillution might not be reflected in share price. How many layman know about the dillution? If not much ppl know how can it be reflected in share price?
Hotrod. I think the reason is the proposal was designed when Insas share price was $1.2x
beso it's obvious you have no clue. the rps is like a CD, you pay rm1 and you get rm1 back in 5 years and 4% a year interest along the way. It has absolutely NOTHING to do with the share price.
dilution only happens when the share float increases because more share decrease the nta per share. when share bought back there are less shares so it increase the nta per share. get it ? so warrants do NOT increase nor decrease the nta per share UNLESS they are exercised ! is that too hard to grasp ? if the warrants all expire and none have been exercised there has been NO dilution. so, dilution oni occur when warrant is converted to share because now there are more shares and the nta is less per share. but if company buy back shares in amounts about the same as warrants converted than there is also no dilution because one offset the other.
It's more like you have no clue what's he is saying.
Since someone was basically saying free convert one warrant to mother share, why bother paying RM1 to subscribe rps to convert when you can buy insas at 91c.
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Posted by labursaham > 2015-01-14 11:53 | Report Abuse
This stock is intentionally and artifcifially pushed up for people to subscribe to the rights issue. No surprise. So chances are, after the payment for the rights, the mother share will drop back to through. Not worth the risk.
Investors that want to go through this exercise should look at E&O. You don't have to pay single cent but you get free warrants plus a bonus issue. This is the real reward for shareholders.