It's rounding down your entitled rights to 1 right share.
(01-09-2014, 01:11 AM)Caelitus Wrote: [ -> ]Is anyone able to shed light if excess rights are given to round up your entitled rights or your overall holdings (if you have odd lots prior to rights issue)?
The BT raised 3 more properties with potential for sale:
Orchard gateway - 618mio
Waterside condo - 266mio
Mt Elizabeth Link - 190mio
Let's see whether the sale materialises.
I noticed that the OCBC R and OCBC R125 are trading at very low volume today. Shouldn't investors be buying into the rights to round up their shareholdings to multiples of 100/1000?
Anyone care to shed some light, pls? Thanks.
(02-09-2014, 12:27 AM)pantoo Wrote: [ -> ]I noticed that the OCBC R and OCBC R125 are trading at very low volume today. Shouldn't investors be buying into the rights to round up their shareholdings to multiples of 100/1000?
Anyone care to shed some light, pls? Thanks.
According to OCBC, 80% of investors take up the scrip dividend scheme every year - so essentially 80% of the people do not mind ending up with odd lots over time.
If the rights are trading at a very steep discount or premium (after brokerage) then I guess investors will be looking at them with more interests - rounding off holdings to 100/1000 is rather trivial if you are in for the long run, i think.
My perspective:
A)
3 reasons that people would want to sell their rights.
1. They do not wish to increase their holdings of OCBC
2. They want to have the cash, after all its almost a free gift.
3. They dislike odd lots
B)
3 reasons why people would want to buy more rights
1. They want to own more OCBC shares
2. They see the issue price of $7.65 as a good price
3. They do not mind odd lots
Nonetheless, the rights have a time limit.
As the date draws nearer when trading of rights ends, which group ( A or B ) would be more anxious to sell or buy?
Thanks all for the information. If I do not subscribe to the rights, will it be gone? Hence, if I do not want additional shares, I should sell it now before 9 Sept. Am I correct?
(02-09-2014, 09:35 AM)Porkbelly Wrote: [ -> ]3 reasons why people would want to buy more rights
.......
2. They see the issue price of $7.65 as a good price
If an investor buy the rights off market, then his cost of the mother share would be = price of rights + subscription price of $7.65
It make sense for the investor to buy the rights off market if the rights are selling at significant discount (after brokerage).
The rights issue price of $7.65 is only meaningful to the original rights owner. Whether it is a good price is immaterial to the rights buyer, imho.
(02-09-2014, 01:13 PM)pantoo Wrote: [ -> ]If I do not subscribe to the rights, will it be gone? Hence, if I do not want additional shares, I should sell it now before 9 Sept. Am I correct?
yes - you should sell if you do not wish to exercise else the rights will just expire worthless. (and disappear from your CDP account)
guys, thank you so much for your informative replies!
