25-03-2013, 02:36 PM
(This post was last modified: 25-03-2013, 04:26 PM by Temperament.)
(25-03-2013, 01:24 PM)nsengkia Wrote:Thanks for sharing.(24-03-2013, 03:15 PM)Temperament Wrote:(24-03-2013, 02:40 PM)Gaudente Wrote: only an idiot would purchase the shares on the last cum rights trading day ... the bargain is usually done by purchasing the rights (that usually trade at a discount to the ex rights shares) in their last trading days and then subscribing the new shares.
What a pity that me - being a foreign investor - cannot do that
Do you mean purchasing the "nil-paid-rights" and then subscribe after ex rights? But i think it's usually not trading at a discount to the theoretical ex rights shares price. And even if at a discount, no one is sure what the real ex rights price will be. So the fundamentals of the company and the reasons for asking you for "extra money" still count.
Some sharing of experiences from my younger punting days.
If you are a very small player, or interested only in coffee money, than punting deeply discounted rights issues is doable on a rather consistent basis (i.e. no black swan event during the rights period).
The key is the excess rights application and the priority given to small shareholders to make up for odd lots. Also, based on my experience, for this to work, you cannot do it with "nil-paid-rights" (alone) as you must have (some) shares in your account to qualify for the excess rights.
Cheers!
i had an experience buying nil-paid-rights not for punting but to subscribe. When there seemed to be an overhang in the market. (At that time i thought the share would be yield accrediting in longer term.) And of course it was trading at a discount to the theoretical ex right price. i were taking a risk if the Market was right, then i would have lost when the share went ex-right. In fact i bought average down the price at least 8 times. The 9 time, i didn't get to buy. The market seemed to reject this share rights issue quite "badly". So it was really crazy for me to do it. But i was buying for long term. i still hold this share and it's in the money, actually since ex-right.
Whew!!!
Average down 8 times. Could you imagine how crazy i were? i don't know whether i will or can do it again?
Nothing is a sure thing yet 8 times average down. if i did not buy all the way average down, but at today price, i still make some money.
Whew!!!
Will i do it again? Perhaps if opportunity knocks at my door, why not?
i think 9 average down buying action is my record until today.
So you see the Market can behave very crazy (inversely) at times yet the ex-right price was actually better than the theoretical ex-right price.
Shalom.
Amen.
WB:-
1) Rule # 1, do not lose money.
2) Rule # 2, refer to # 1.
3) Not until you can manage your emotions, you can manage your money.
Truism of Investments.
A) Buying a security is buying RISK not Return
B) You can control RISK (to a certain level, hopefully only.) But definitely not the outcome of the Return.
NB:-
My signature is meant for psychoing myself. No offence to anyone. i am trying not to lose money unnecessary anymore.
1) Rule # 1, do not lose money.
2) Rule # 2, refer to # 1.
3) Not until you can manage your emotions, you can manage your money.
Truism of Investments.
A) Buying a security is buying RISK not Return
B) You can control RISK (to a certain level, hopefully only.) But definitely not the outcome of the Return.
NB:-
My signature is meant for psychoing myself. No offence to anyone. i am trying not to lose money unnecessary anymore.