Posted by penunggu > 2013-09-17 18:07 | Report Abuse

sifu FCTB trying very hard to warn us here.....hahahaha

Posted by KC Loh > 2013-09-17 18:14 | Report Abuse

行使价是隨时间消逝而增加的凭单 = time value. go read up!

Posted by KC Loh > 2013-09-17 18:15 | Report Abuse

sorry, the post is for Avacodo-C's reference, not anyone else! :)

Posted by penunggu > 2013-09-17 18:21 | Report Abuse

sifu kcloh appeared....hahahaha...

Posted by KC Loh > 2013-09-17 18:27 | Report Abuse

steady skpres-wa, steady! :)

Posted by KC Loh > 2013-09-17 18:35 | Report Abuse

as again shown stupidity, this is skpres-wa thread.

after being exposed as a liar, difficult to swallow i guess! :)

Posted by kcchongnz > 2013-09-17 18:36 | Report Abuse

This is how I interpret the bahaviour of Mr Gan. He still have the confidence of his company, SKPRes, and that is no doubt about it. So he buys the underlying shares from the market in a big way and hence the share price rose up to 40 sen. He is willing to pay up to that price, or even higher because I think he knows SKPRes is worth that price.

Market participants saw the rise in the underlying share and insider buying and they follow suit. But many were buying the warrant because they think the warrant is "cheap", even when it rose up to 10 sen in tandem with the rise of the underlying share to say 40 sen. Moreover the warrant provided a gearing of about 4 times then. It is a good punt for many people. However many do not understand how to value warrant.

So Mr Gan dumped all his warrants at good prices. His action still give him a firm grip of the firm with probably the same controlling power with his increased holding in the underlying share though he cleared his warrants.

He dumped the warrants because actually the warrant was expensive at 10 sen when the underlying share price was 40 sen. Don't forget that SKPRes pays high dividend yield. The shareholders of SKPRes enjoy the dividend but not the warrant holder. Hence the high dividend yield actually destroys the value of the warrants in a big way.

Using an option pricing model,when SKPRes was at 40 sen, and a historical volatility of 30%, the value of the warrant is only half of the market price of 10 sen. similarly with the market price of the underlying at 35.5 sen now, the value of the warrant is also only half of that. Incidentally the value of the warrant is made up of two parts; the intrinsic value and the time value. The intrinsic value of the warrant is zero and all its value is in the time value.

So if you are Mr Gan, which will you prefer to hold and which to sell?

Let us forget about the complicated option pricing and look at the premium of the warrant now. With an exercise price of the warrant at 45 sen, the premium at the present price of the underlying share and warrant at 35.5 sen and 7 sen respectively is 46% [(.07+.45)/.355-1].

That means the holder of the warrant can only breakeven if the underlying share price rises by 46% to 52 sen before expiry of the warrant in less than 4 more years. That also means the underlying share price must rise by a compounded annual rate of about 10% for the next 4 years for that to happen. It really doesn't sound difficult at all, does it because that is roughly the long-term return of the market? Moreover one doesn't have to wait until expiry of the warrant to sell it. It is the American style of option.

Not until you take into consideration of the high dividend payout each year which will erode the value of the company, and the staggering exercise price; ie the exercise price will increase to 55 sen in the fourth year, and then 65 sen in the fifth year. This staggering of the exercise will further diminish the value of the warrant.

Of course one may make money without having to know the value of the warrant because then it is a supply and demand situation. This is also because most market participants have no idea of how the value of the warrant is made up of. But punting with the insiders will be at a great disadvantage. don't you think so?

Posted by Fat Cat Tim Buddy > 2013-09-17 18:38 | Report Abuse

https://www.youtube.com/watch?v=kc4wTcAsvfU

歌名：《前传》
作曲：林子祥 填词：郑国江 演唱：林子祥

燃亮我意志 鼓起我勇气 前面去再创传奇
从没有计较 是否好天气 下决心再要逆风飞
又再有勇气 愿趁风再起 万里飞佳绩胜预期
未怕雪再冷 只想高高飞 共挽手一起再冲刺
光阴不会往后退 应抛开伤心的戏 愿我会 拭干眼中泪
天空海阔我共你 再领略人生的美 云外看 新生趣

又再有勇气 愿趁风再起 万里飞佳绩胜预期
未怕雪再冷 今天高高飞 共挽手一起再冲刺
光阴不会往后退 应抛开伤心的戏 愿我会 拭干眼中泪

天空海阔我共你 再领略人生的美 云外看 新生趣
不管多艰辛 只需有志气 让我冲冲冲 直上九霄去
前路有进退 三载厚阅历 求做到 能做到 是进取

光阴不会往后退 应抛开伤心的戏 愿再胜 高飞的滋味
天空海阔我共你 再领略人生的美 云外看 新生趣

Posted by KC Loh > 2013-09-17 18:41 | Report Abuse

five-foot way minstrel appears! LOL

Posted by Avocado_C > 2013-09-17 22:43 | Report Abuse

Thanks, Kcchong's explanation make sense to me, which also means the pricing of warrants (now and then) is not favorable to investors. Why would SKPRES issue a warrant with step-up exercise price? Again, were they over confident or intentionally make it out-of-the-money? I didn't buy this warrant as the % of premium is too high for me, I am only comfortable with those 20% or less and reasonable time to maturity.

Posted by Alex Leow Sze Shen > 2013-09-18 00:01 | Report Abuse

buy SKPRES-WA, if mother move up, sure warrant will follow!

Posted by kcchongnz > 2013-09-18 05:06 | Report Abuse

The premium and time to expiry are important factors in the pricing of the warrant. However they are not the sole determinants of whether it is expensive or not. The other factor which is as important is the volatility of the underlying share; how violent or calm the movement of the share price.

Even with a premium of 46% for SKP Resources, and even if the expiry date is shorter, there is still a good chance for SKP Res to get into in-the-money, if the share price moves in a wide gap, or high volatility.

In fact in my opinion, if the premium of the SKP Res is 20%, or even 30%, it is a better alternative investment compared to the underlying share. Moreover there is a gearing of 4 times which is reasonably high and hence good as a leverage instrument.

Say for example, if there are good news on SKP Res such as great improvement in earnings, SKP Res can move much higher and hence a spike of volatility in the upward side, the 46% premium of the warrant is not high and investors could still make money.

The step up exercise prices of SKP Resources of which the management intended for the warrant holders to exercise earlier, pose a greater challenge for the profitability in investing in the warrant at the present price.

Of course the other factor which is also as important is the supply and demand. Even if the warrant appear to be expensive, the market action may still provide profit opportunity for the warrant holders. But that is more of a speculative endeavor.

Posted by Fat Cat Tim Buddy > 2013-09-18 10:00 | Report Abuse

good luck! gogo skpres! kikiki..

Posted by KC Loh > 2013-09-18 10:07 | Report Abuse

volume volume volume! :)

Posted by Fat Cat Tim Buddy > 2013-09-18 10:15 | Report Abuse

云外看 新生趣~~~~ kikiki

Posted by KC Loh > 2013-09-18 10:17 | Report Abuse

Should start going to investopedia to read up premium more! LOL

Posted by KC Loh > 2013-09-18 10:21 | Report Abuse

now kcchongnz mentioned about volitility! investopedia it up! hehehehe

Posted by penunggu > 2013-09-18 11:37 | Report Abuse

sifu kcloh, sifu kcchongnz & sifu FCTB, under what circumstances we can fully utilize WA & SW ?

Posted by KC Loh > 2013-09-18 11:40 | Report Abuse

i am no sifu. you can try knock on the other two..... or one & a half to be honest! LOL

Posted by KC Loh > 2013-09-18 11:41 | Report Abuse

going out breakfast. now where is my other half doped up fella who likes sardines? hehehehehe

Posted by penunggu > 2013-09-18 11:42 | Report Abuse

u must be saving a lot of money ! now only breakfast ?

Posted by KC Loh > 2013-09-18 12:29 | Report Abuse

Never thought it that way....but yeah, you are right! :) brunch!

Posted by penunggu > 2013-09-19 09:00 | Report Abuse

today penunggu are heading to the fighting arena - the Colosseum with my cangkul to fight with the WA gladiators !

Posted by penunggu > 2013-09-19 09:05 | Report Abuse

warriors with iron balls ! be ready with your weapons......

to the pussies - please stay aside to look see look see only, you will be safe with your 50% premium, so enjoy the show

Posted by solomon > 2013-09-19 10:18 | Report Abuse

TP 0.11

Posted by solomon > 2013-09-19 10:35 | Report Abuse

Again is this 0.08 resistance.

Posted by agent101 > 2013-09-19 11:24 | Report Abuse

damn 0.08

Posted by Alex Leow Sze Shen > 2013-09-19 11:30 | Report Abuse

Mother share must move only warrants will move

Posted by penunggu > 2013-09-19 13:00 | Report Abuse

kinda agree with alex....we should make reference to mother share resistance not WA.....

Posted by Alex Leow Sze Shen > 2013-10-16 17:01 | Report Abuse

Huge buying volume end of 10 minutes, wondering what is going to happen tomorrow!

Posted by mattewchew4984 > 2013-10-16 22:54 | Report Abuse

Sifu, Still can enter to buy it?

Posted by Alex Leow Sze Shen > 2013-10-16 22:55 | Report Abuse

Yes, the chart is all positive, if possible buy at 0.075!

Posted by mattewchew4984 > 2013-10-16 22:59 | Report Abuse

How high will it go?

Posted by Alex Leow Sze Shen > 2013-10-16 23:17 | Report Abuse

based on chart it will reach 0.10!

Posted by 2862862 > 2013-10-17 23:26 | Report Abuse

Alex, hope what u said come true!!

Posted by Alex Leow Sze Shen > 2013-10-17 23:29 | Report Abuse

let' see in this 2 days b4 mother ex date for dividend

Posted by hom3boy > 2013-10-22 19:48 | Report Abuse

no suprise

Posted by Pen Biru > 2013-11-26 10:29 | Report Abuse

any hope

Posted by billionhair > 2013-12-01 10:09 | Report Abuse

sigh ... getting lower

Posted by nicholai1983 > 2013-12-04 13:10 | Report Abuse

I heard insider said, that they purposely pull down the price. Now price too far from mother share. They will start push it up today afternoon to 10sen. Else major shareholder ald make noise

Posted by Wing Yean Kan > 2013-12-04 15:25 | Report Abuse

Noon still left 1 and half.... volume still 0....

Posted by nicholai1983 > 2013-12-04 17:30 | Report Abuse

who say volume 0?? last minute come at 16:13:27 and 16:16:45, total volume 293,100

Posted by nicholai1983 > 2013-12-06 09:06 | Report Abuse

Today 0.075 i think can reach

Posted by nicholai1983 > 2013-12-07 17:08 | Report Abuse

we see on monday

Posted by Pen Biru > 2013-12-18 09:50 | Report Abuse

lower

Posted by KC Loh > 2014-01-02 10:59 | Report Abuse

6.5 sens only 800 units left. come come 7 sens.

oh hafizsapi, you never collected at 5.5 sens ka? LOL

Posted by KC Loh > 2014-01-02 11:11 | Report Abuse

alamak 200k SELL just masuk! LOL

Posted by KC Loh > 2014-01-07 11:22 | Report Abuse

Aisey sudah masuk 7 sens :)

Posted by Pen Biru > 2014-01-22 17:19 | Report Abuse

lol

Posted by sahamdunia > 2014-03-20 17:45 | Report Abuse

Ni lg satu....kaunter kayu.. batu..beku... layuuu