when? anytime you like from start trading date till 5 years go by. rate? redeem rps for 1 warrant. no cash required. more warrants require rm1 cash unless you bought more rps on offering or in aftermarket.
Look at PerakCrop! Once again proven value investing works, but not for the faint hearted. Insas is in the same category. Have faith, guys! The value will be unlocked. It's just a matter of time.
Hi,gweilo,redeem one RPS thatu pay RM 1 for it for 1 warrant n later pay another around RM1 FOR converting W to M.share,why don just buy mother share, where less than RM1 THAN almost RM 2 PAY for RPS to W to M.share?
Hi al friend,if u buy RPS get 2 W,convert n convert, u get 3 M.share,u pay 4.00 for it =1.33 per M.share,but now M.share only 0.88,if up to 1.33 u already make 0.47 each,but if u buy RPS+W+convert,u make 0.00cent
The idea is that you DON't convert ! You get your rm1 back in 5 years with interest. Or, you can sell in open market if you like. If mother goes to RM2 say in a year, warrant will be RM2.25. Then sell the warrant. All PROFIT. NO cash outlay. Even if warrant trade at .25 the day after offering, sell both and make .50 sen profit ! NO cost! NONE. NIL. NADA. Still have mother to keep. Better than dividend manz.
The main selling point of the multi proposal is time value. The warrant inherits time value & the RPS serves as a token to convert your warrant when timing is favorable. Moreover, the RPS can earn interest while waiting.
Ok lets pretend at the moment for simplicity you bought 100,000 shares of insas earlier at RM1 and the price of the mother is RM1 at the offering.
Now the day after the offering you get 40,000 FREE warrants.
Day after the offering the warrants begin to trade at 0.25 RM,
So, you sell your mother shares for 100k and use the proceeds to buy 400,000 more warrants,
Now you control 440,000 shares of insas by virtue of the warrants. You no longer own the mother.
Now say, a year from now the mother share is RM2. The warrant price will be at least RM2.25 due to the time premium.
You sell your 440,000 warrants for RM990,000, a PROFIT of RM 890,000 !!!
If you had simply kept the mother and sold them you would have gotten RM200,000 or a profit of RM100,000.
By selling the mother and buying the warrant you increase your profit almost 9x for the same amount of capital !!!
This is called GEARING !
Of course the risk is that the closer the warrants get to expiring the lower the premium and they can in fact expire worthless.
This is why ALL warrants are speculative BUT if you really believe a company is undervalued and it's value will be unlocked within a few years than you can control far more stock at a lower price and make much more profit than by owning the mother share.
I may in fact do exactly this. Sell all my mother and buy as many warrants as I can with the proceeds. Notice that in the scenario above I never converted anything and the 20K I paid for the RPS I will get back in 5 years with 4% interest or I can sell it in the open market beforehand if the price is acceptable to me.
You can also NOT take up the offering and also play this game by selling the mother and buying the warrants in the after market. i.e NO cash required at all.
Many professionals arbitrage this way because this action will drive up the warrant price and drive down the mother and eventually they will sell the warrants and buy the mother to correct the price and keep the two in balance. But, both will still rise or fall based on VALUE and growth performance of the company itself.
So, if you are a believer in Insas, go for it ! If you are a trader looking to make a fast buck flipping shares, find another counter. Hamsub sandwich can advise you on this as he is an expert on flipping. Me, I am an INVESTOR ! I'm sticking with Insas long term.
This post is only to demonstrate the power and usefulness of warrants.How they provide leverage and the ability to control large blocks of shares with less capital but albeit higher risk.
Ya. However, the way Insas was played last time, it went more than 20% up in a day twice, first time from 65 sen to 80 sen region. Another time 90 sen region to 1.20-1.30. And in those times, Inari was valued much lesser back then. I'm anticipating more action during this corporate exercise.
hi kingstocks... pls see back mililia comment above then u know detail... this RPS & warrant are considered as another pieces of insas(idependen) and hence u are borrowing money to insas to get RPS ans warrant... so, the mother will not be adjusted even its ex this friday... thanks
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gweilo
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Posted by gweilo > 2015-01-20 13:45 | Report Abuse
when? anytime you like from start trading date till 5 years go by. rate? redeem rps for 1 warrant. no cash required. more warrants require rm1 cash unless you bought more rps on offering or in aftermarket.