How to convert a company warrant

Steps on How to convert a company warrant into a main stock ?

1. The interested party must buy the particular warrant

2. The holder must check the warrant information from www.sgx.com
Excerise price , conversion ratio and company phone number of the warrant agent.

3.The holder must call the company that converts the warrant to request the exercise form.

4. The holder must give his address to the company to sent the exercise form
And thereafter fill in the required information.

5. The holder must pay the exercise price of the warrant by only a cashier order issued from a bank .

6. The conversion may take 3-5 working days for the conversion . Do check in the cdp account .

7. Once is converted. And shown holdings in cdp, holders will entity dividends and able to sell the stock      

First Reit Rights

 I was allotted with 1.5 excess rights of first reits. This have lower the average purchase price for 6 lots of first reits per lot to 65cents. disregarding the brokerage charge 8% capital gain .

Including the brokerage charge a 6% gain .

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 ?