Basing on my cost of RM12,300(RM10,000+RM2,300), I sold my 10,000 PA at RM0.82 & 20,000 WB at Rm0.27= RMRM13,600. Profit is ard RM1,300 or abt 11% in 3 weeks'time....Not bad
Mr. KC Chong, based on your calculation and details, does this mean that the Insas-pa I just now bought at RM0.80 will give me a return of 6.42% pa if hold it to maturity based on my simplified calculation ie. 0.935/0.80 multiply by 5.5% = 6.42%. Please advise me accordingly if my calculation is not correct. TQ
I only get extra 1 lot excess for a total of 5 lots. I thought they would give me 6lots and beautify it to 10 lots with 20lots WB. Wasting my MO money...
so weird. remember all those who bitch about low insas dividend of 1 sen. Well now they can get 8 sen a year and guaranteed rm1 back at end of 5 years so what do they do ? more bitching ! no pleasing some people, where else can you get 10% guaranteed return on anything for 5 years?
no. you can not convert to cash. if you could it would be RM1 already ! you have 3 choices:
1. use the PA to convert a warrant to a mother share. 2. sell the PA in the open market. 3. hold the PA for 5 years and get 5 % a year dividend + 25% gain at the end of the 5 years (assumes you bought it in open market at 80 sen.
The PA at 80 sen is a SCREAMING BUY ! I can't see it staying here for long cause its just too DUMB !
If warrant price at RM0.26 and need to pay RM1.00 to convert it to mother share,so total cost is RM1.26 .Why not buy mother share from market, it's only RM0.86!
Posted by ashley88 > Mar 3, 2015 03:19 PM | Report Abuse
If warrant price at RM0.26 and need to pay RM1.00 to convert it to mother share,so total cost is RM1.26 .Why not buy mother share from market, it's only RM0.86!
Warrants have two parts of value; intrinsic value and time value.
Intrinsic value of Insas warrant is zero, kosong as the exercise price is higher than the mother share price, IV = Max (0, S-x)
What Insas warrant has is its time value which can be a lot depending on how volatile is the underlying share price in the future. If the mother share is volatile and can fluctuate up to say Rm1.50, Insas intrinsic value will be 50 sen, Max (0, 1.50-1.00). And Insas has 5 year to do that for warrant to have that IV.
What if gila gila Insas share price can go up to its net asset backing of RM1.82?
Is that really gila at that price at RM1.82 as Insas assets are mostly cash or cash equivalent and investment which if marked to market, will be a lot more higher than RM1.82?
And warrant has 5 long years to wait for that to happen.
The other part on warrant is the gearing. One Insas cost you can buy over 3W. If Insas price does surge, which is highly possible. The gearing on W would give you better % return.
Hope Ah thong director won't bring investors to Holland .. Money on hand with wb n Pa ..successful with list all related shares of insas .but until today insas stock price is not perform .Pray for it like Mh 370 ..
I sold all warrants. At 50 % premium there's no reason not to take profit. The probability of 'gila2' comes is very low according to Insas historical share price. When ppl notice warrant premium too high they might sell down warrant & switch to mom.
You buy at 80 sen get 20 sen dividend over 5 years + 20 sen cap gain or 40 sen income over 5 years. 40 sen gain is 50% of 80 sen price paid or 10% per years. Look at it another way cost is 80 sen and after 5 years total collected is RM1.2 or 40 sen. 10% of 80 (cost) is 8 sen x 5 years is 40 sen. i.e. 10% a year. But this is ONLY if you buy PA in open market at 80 sen of course.
ok maybe make it more simple for simpletons. you buy at 80 you get 4 sen a year dividend + 4 sen a year cap gain (20/5yr). That's 8 sen a year. 8 sen a year is 10% of 80 hence 10%. Of course you dun collect the 4 sen a year until you redeem after 5 years. IT's still 10% a year no matter how you slice it.
ok... i guess you are correct if you calculate that way. but that 10% a year is not annualized returns, its more of the average return per year. I think below is more accurate way. Either way its still a good low risk investment.
Blog: Valuation of Insas Preference Share and Warrant kcchongnz Mar 3, 2015 01:37 PM | Report Abuse
Posted by Kris Wong > Mar 3, 2015 10:28 AM | Report Abuse
Mr. KC Chong based on your calculation and details, does this mean that the bond-like Insas-Pa I bought at RM0.80 this morning will give me a return of 6.42% pa if I hold it to maturity based on my simplified calculation ie. 0.935/0.80 multiply by 5.5% =6.42%. Please advise me if my calculation is not correct. TQ
Use a financial calculator, or a spreadsheet and put these values:
PV = 0.8 FV = 1.00 PMT = 0.02 for 2 sen dividend every 6 months N = 10 There are 10 semi-annual payments
You will find that the yield-to-maturity equals to 4.53% per period, or 9.06% for a full year. That is the return you are concern of.
With RPS at 82 sen now, the yield to maturity will be 8.5%. It is still a decent return considering that it has little risk but twice return from FD.
yeah hard to grasp. people here bitch n bitch about low insas dividend so insas now give them opportunity to get best dividend anywhere and what do they do ? they bitch ! ?????????????
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Posted by imoogi99 > 2015-03-03 09:35 | Report Abuse
Oops.....insas-pa no more 80 sen lor. Guess all realize the benefit and sapu habis.