Usage of first reits rights

http://info.sgx.com/webcoranncatth.nsf/VwAttachments/Att_640F68891519920348257809003EF130/$file/MRCCC_Use_of_proceeds_announcement_Final.pdf?openelement

Manager is pleased to announce that out of the net proceeds of the Rights Issue of
S$167.3 million, S$121.7 million has been used towards part financing the MRCCC
Acquisition. Such use is in accordance with the stated use and in accordance with the
percentage of the net proceeds of the Rights Issue allocated to such use. The remainder
of the cost of the MRCCC Acquisition will be financed by way of a transferable term loan of
up to S$50.0 million for a term of four years from Oversea-Chinese Banking Corporation
Limited.


First reits closed at 70.5 cents 

why company issue warrants in singapore

Companies issues warrants to raise capital or capital preservation. 

Warrants raises capital when warrants holders convert their warrants into a main stock by paying an exercise price. Warrants are a form of capital preservation issued to (1)share holders instead of dividends, (2) compensation CEOs, companies employees as substitution to cash, (3) compensation to investment banks for their underwriting and other banking services.

What are warrants ?

Its a financial tool that allows the holder to convert it into a main stock by paying a exercise price by the expiry date. The holder has a right but not an obligation to convert the warrant into the main stock. The warrant can be traded in the stock exchange. The price of warrant is usually lower than the current stock prices.

Two sides of the coin 

Cons :Warrant has an expiry and its does not gives dividends and it dilutes the main stocks.

Pros: 

1. Right to buy shares at the exercise price so if the price by the warrant holder is not attractive, the holder can choose not to convert it

2. Its only a portion of the stock price (low cost)

3. Its has a relative higher profit % as compared to purchasing the main stock

First Reits Date of rights conversion into shares

The rights conversion would be converted on 30 dec
The rights converted shares would be ready to trade in 31 dec

Since the first reits have not been moving much
hope the January dividend will push it higher !

singapore inflation

http://sg.yfittopostblog.com/2010/12/23/inflation-hits-highest-level-since-jan-2009/

Seems singapore, china is having increase in inflation . = This may lead people trying to beat inflation

China review

China interest rates and loan
 
quoted from  
http://www.bloomberg.com/news/2010-12-15/china-may-lift-rates-6-times-next-year-on-inflation-mizuho-s-suzuki-says.html


On date 16december (china kept the interest rate at 6%) and tightening credit of banks lending(reserve requirement ratio is about 20%)    


Is predicted to be rising next year and banks will loose their reserved ratio


Growth predicted is about 8-10 percent with difficulty in sustaning growth of above 10%

Dear readers I do like comments of how this will affect stock prices ? 



      

Pacific Andes warrants

Price : 0.125 
Excerise price:0.23
CD: 1st feb 
I bought 7 lots of pacific warrants
price 0.355

Golden Agriculture Warrant dec 21/2010

signs of weakness immediate support 21.5 cents if it breaks 19.5

My Stocks Dividends

	Price	CD date	XD date	amount
			last year
courage ma	0.18	3-Apr	3-May	0.006	3%
Aimams Reit	0.22	12-Jan	12-Feb	0.0039	1.80%
Saizhen Reit	0.16	6-Apr	6-May	0.0026	1.60%
First Reit	0.69	28-Dec	28-Jan	0.019	3%

Cfds VS Warrants VS Stocks

Cfds VS Warrants VS Stocks


We have an ongoing discussion on differnences on CFDs, Warrants and Stocks . The former 2 are leveraged products where the latter is a non leveage product.
And a dear friend also suggested mr to do a write up on the case.

Leverage products are products that allows you to purchase stocks and equities at fraction of it's total cost

For instance, mr x uses 1000 dollars in warrants or cfds (leverage 5 times) : meaning he can buy up to 5000 dollars 
Of stocks 

Stocks bought with leverage 
= price of warrants x number times leverage
= 1000 x 5= 5000 dollars

Advantages :
This means if the stock rises by 10% 
Mr x would have made 
5000 x 10% = 5500 
Mr x will have made 500 from 1000 dollars investment . So he will have 1500 dollars from selling his warrants .
5500-5000 =500

% profit = (1000-500)/1000 x 100
= 50%

As compared to non leverage , 
Profit is only 10%
1000x 10 % = 100

Profit difference of trading warrants to stocks  = 400 dollars more ! 

Disadvatages  

On the double edge sword ,if the stock drops by 10% 

Warrants and cfds will lose 50% of it's capital . mr x will lose 500 dollars from the 1000 he invested . 
So he will left with 500 dollars if he sold the warrants

If he bought 1000 of shares  he would only lose 100 dollars 

1000 x 10%= 100
1000-100= 900

Thus leveraging is a double edged sword . You can both manigfy your lost and gain .



  

I love gaps :)

In candle sticks can any one tell me why we love gaps ?

sold agri 14 lots realized $610 gain

			Aldwin Chan as in 8/12
Dr
Date	stock	Quantity	Price	paid	Current price	Current value
19/11	First Reit	2000	0.704	1408	0.735	1470
22/11	Golden ari W	10000	0.175	1750	0.21	2100
24/11	Golden ari W	10000	0.16	1600	0.21	2100
		3000	0.704	2112	0.735	2205
	Total stocks			6870		7875
	Profit		1005
	Profit-brokerage		865
Cr
Cash		0
Owner Equity		6870
profit		755
			Aldwin Chan as in 8/12 sold agri
Dr
Date	stock	Quantity	Price	paid	Current price	Current value
19/11	First Reit	2000	0.704	1408	0.705	1410
22/11	Golden ari W	6000	0.175	1050	0.21	1260
	Total stocks			2458		2670
	Paper Profit		212		Realised
	Profit-brokerage		62		gain	610
Cr
Cash		0
Owner Equity
profit

dec 8

			Aldwin Chan as in 8/12
Dr
Date	stock	Quantity	Price	paid	Current price	Current value
19/11	First Reit	2000	0.704	1408	0.735	1470
22/11	Golden ari W	10000	0.175	1750	0.21	2100
24/11	Golden ari W	10000	0.16	1600	0.21	2100
		3000	0.704	2112	0.735	2205
	Total stocks			6870		7875
	Profit		1005
	Profit-brokerage		865
Cr
Cash		0
Owner Equity		6870
profit		755

Producing a profit of $615 with a capital of $6870 within 2 weeksweeks

The commerce of new funds started in 19 November 2010 when I wanted to challenge myself on 30 days trading timeframe
I concentrated on 2 respective stocks golden agriculture warrants and first reits
my unrealized profit is about $615 after brokerage charges near to 8% capital gain
an excel is below

			Aldwin Chan as in 3/12
Dr
Date	stock	Quantity	Price	paid	Current	value
19/11	First Reit	2000	0.704	1408	0.745	1490
22/11	Golden ari W	10000	0.175	1750	0.2	1900
24/11	Golden ari W	10000	0.16	1600	0.2	2000
		3000	0.704	2112	0.745	2235
	Total stocks			6870		7625
	Profit		755
	Profit-brokerage		615
Cr
Cash		0
Owner Equity		6870
profit + brokerage		755

capital of 6870

			Aldwin Chan as in 29/11
Dr
Date	stock	Quantity	Price	paid	Current price	Current value
19/11	First Reit	2000	0.704	1408	0.745	1490
22/11	Golden ari W	10000	0.175	1750	0.2	1900
24/11	Golden ari W	10000	0.16	1600	0.2	2000
		3000	0.704	2112	0.745	2235
	Total stocks			6870		7625
	Profit		755
	Profit-brokerage		615
Cr
Cash		0
Owner Equity		6870
profit		755

Golden Agriculture Analysis On when To Buy Or Sell

resistance at 77 cents 

last peak at 80 cents 

up trend intact 

higher high

higher low

First Reits Average Price

Quantity 2lots bought
2000 x $0.955 = $1910

with every share, the shareholder is entited to purchase 1.25 share at $0.5
2000 = 2500
entitled rights = 2500 x 0.5 = 1250

Average price per share = (1250+1910)/4500= 0.703

current price 0.745-0.703= 0.042 current gain per share
0.042 x 4500 = $189


but rest assured chart nexus helps us calculate