King Wan Corporation

(24-06-2014, 09:27 AM)GFG Wrote:

(23-06-2014, 12:44 AM)GPD Wrote:

(22-06-2014, 11:52 PM)orangetea Wrote:

GPD Wrote:Going through KWC annual reports, CIMB appeared in top 20 only in 2013 report. They hold 4.858mil shares. They released an analyst report in 27 July 2012 on the sale of the two Thais assoc. Looking at Price/Vol action in 2012, they probably bought in the range of 15cts-20cts. I don't recall seeing any analyst report from CIMB on KingWan since. Now let see if CIMB release one soon. Recently, the house that has been promoting KWC aggressively is OSK. They did not appear in the top 20 in 2013 AR. They should appear in the 2014 AR. Lets see. Lets see the holding of the other houses. Kim Eng - 17mil shares UOBKH - 3.9mil shares OCBC - 3.8mil shares Phillips - 2.9mil shares Interesting I didn't come across any analyst reports from KE.

Somehow i don't think the brokerage houses own the shares.
I do think they are nominee accounts to which the persons owning the shares pledge to these brokerages (deemed interests)
I may be wrong too.

I think it will be great if buddies who know about this can clarify. I have always assumed that those with "(nominees)" are own by others through the house. Those without it are own by the house.

Those who utilize leverage from the house will have to pledge their shares to the house. The shares will show up in the AR under the brokerage houses, but in reality, they are owned by the various individuals so you wont know exactly who owns what.
There are instances when the brokerage houses owns some shares directly but there's no distinction.
I personally own 1 million shares in KW, but they are pledged under Hong Leong Finance.

GFG, what HL gives u in return for pledging the shares?

Leverage. Its basically Margin trading. Pledge shares leverage lower and there is cdp transfer costs involved. Pledge cash higher leverage that's all. They charge you interest for the leverage amount and some other fees per quarter and annually.

😇天堂与地狱😈就在当下

(24-06-2014, 10:48 AM)Life is a game Wrote: Leverage. Its basically Margin trading. Pledge shares leverage lower and there is cdp transfer costs involved. Pledge cash higher leverage that's all. They charge you interest for the leverage amount and some other fees per quarter and annually.

?天堂与地狱?就在当下

Yup that's basically it

I get very attractive tiered rates, <3.5% while KW yield is ard 10% for me
So I earn on the spread
Plus the appreciation is tremendous this far

Danger is if you're not careful and don't have holding power, when you get margin calls you can end up having to sell at the wrong time so be careful with share financing schemes.
Anyone interested to know more can just drop me a msg.

(24-06-2014, 10:48 AM)Life is a game Wrote: Leverage. Its basically Margin trading. Pledge shares leverage lower and there is cdp transfer costs involved. Pledge cash higher leverage that's all. They charge you interest for the leverage amount and some other fees per quarter and annually.

?天堂与地狱?就在当下

Oh just want to add, there isnt any cdp transfer costs involved cos most of the time, the brokerage or bank will be willing to pay for the transfer costs to get your business

Hmm I think that's because you are a big player. I have friends doing this but they don't get your kind of privilege. Lol

😇天堂与地狱😈就在当下

(24-06-2014, 01:56 PM)GFG Wrote:

(24-06-2014, 10:48 AM)Life is a game Wrote: Leverage. Its basically Margin trading. Pledge shares leverage lower and there is cdp transfer costs involved. Pledge cash higher leverage that's all. They charge you interest for the leverage amount and some other fees per quarter and annually.

?天堂与地狱?就在当下

Yup that's basically it

I get very attractive tiered rates, <3.5% while KW yield is ard 10% for me
So I earn on the spread
Plus the appreciation is tremendous this far

Danger is if you're not careful and don't have holding power, when you get margin calls you can end up having to sell at the wrong time so be careful with share financing schemes.
Anyone interested to know more can just drop me a msg.

When you do margin financing you lose control of the asset and there is counter party risk.

The 3 Kings fiasco already show us that the financier like GS can sell or demand for top up anytime they deemed appropriate.

Those who use Lehman as custodian will have higher appreciation of what is counterparty risk. It is not just risk of losing the money, it is that the segregated assets will take a long time to get back while you continue to bleed. Then there is of course the classic counterparty risk as in MF Global.

Sharp tools have to be handled carefully and appropriately

(24-06-2014, 02:25 PM)specuvestor Wrote:

(24-06-2014, 01:56 PM)GFG Wrote:

(24-06-2014, 10:48 AM)Life is a game Wrote: Leverage. Its basically Margin trading. Pledge shares leverage lower and there is cdp transfer costs involved. Pledge cash higher leverage that's all. They charge you interest for the leverage amount and some other fees per quarter and annually.

?天堂与地狱?就在当下

Yup that's basically it

I get very attractive tiered rates, <3.5% while KW yield is ard 10% for me
So I earn on the spread
Plus the appreciation is tremendous this far

Danger is if you're not careful and don't have holding power, when you get margin calls you can end up having to sell at the wrong time so be careful with share financing schemes.
Anyone interested to know more can just drop me a msg.

When you do margin financing you lose control of the asset and there is counter party risk.

The 3 Kings fiasco already show us that the financier like GS can sell or demand for top up anytime they deemed appropriate.

Those who use Lehman as custodian will have higher appreciation of what is counterparty risk. It is not just risk of losing the money, it is that the segregated assets will take a long time to get back while you continue to bleed. Then there is of course the classic counterparty risk as in MF Global.

Sharp tools have to be handled carefully and appropriately

if you get financing from local companies and banks from POEMS, HLF or Orix Capital, its generally safe and not much counterparty risk to worry about.
But as with all forms of leverage, the big risk is margin calls so like I said, you want to be very certain of where you employ your leverage into, and you want to give a big buffer zone so that even if it drops substantially in the near term, you wont get margin calls.
And even if you do get a margin call, you want to prepare such that you have holding power.
So leveraging up several times into a PENNY stock like what happened in the fiasco is a crazy suicidal idea to me.

(24-06-2014, 05:36 PM)GFG Wrote:

(24-06-2014, 02:25 PM)specuvestor Wrote:

(24-06-2014, 01:56 PM)GFG Wrote:

(24-06-2014, 10:48 AM)Life is a game Wrote: Leverage. Its basically Margin trading. Pledge shares leverage lower and there is cdp transfer costs involved. Pledge cash higher leverage that's all. They charge you interest for the leverage amount and some other fees per quarter and annually.

?天堂与地狱?就在当下

Yup that's basically it

I get very attractive tiered rates, <3.5% while KW yield is ard 10% for me
So I earn on the spread
Plus the appreciation is tremendous this far

Danger is if you're not careful and don't have holding power, when you get margin calls you can end up having to sell at the wrong time so be careful with share financing schemes.
Anyone interested to know more can just drop me a msg.

When you do margin financing you lose control of the asset and there is counter party risk.

The 3 Kings fiasco already show us that the financier like GS can sell or demand for top up anytime they deemed appropriate.

Those who use Lehman as custodian will have higher appreciation of what is counterparty risk. It is not just risk of losing the money, it is that the segregated assets will take a long time to get back while you continue to bleed. Then there is of course the classic counterparty risk as in MF Global.

Sharp tools have to be handled carefully and appropriately

if you get financing from local companies and banks from POEMS, HLF or Orix Capital, its generally safe and not much counterparty risk to worry about.
But as with all forms of leverage, the big risk is margin calls so like I said, you want to be very certain of where you employ your leverage into, and you want to give a big buffer zone so that even if it drops substantially in the near term, you wont get margin calls.
And even if you do get a margin call, you want to prepare such that you have holding power.
So leveraging up several times into a PENNY stock like what happened in the fiasco is a crazy suicidal idea to me.

Can you in theory use the leverage to purchase more KWC shares and use those for further leverage?

(24-06-2014, 06:36 PM)GPD Wrote:

(24-06-2014, 05:36 PM)GFG Wrote:

(24-06-2014, 02:25 PM)specuvestor Wrote:

(24-06-2014, 01:56 PM)GFG Wrote:

(24-06-2014, 10:48 AM)Life is a game Wrote: Leverage. Its basically Margin trading. Pledge shares leverage lower and there is cdp transfer costs involved. Pledge cash higher leverage that's all. They charge you interest for the leverage amount and some other fees per quarter and annually.

?天堂与地狱?就在当下

Yup that's basically it

I get very attractive tiered rates, <3.5% while KW yield is ard 10% for me
So I earn on the spread
Plus the appreciation is tremendous this far

Danger is if you're not careful and don't have holding power, when you get margin calls you can end up having to sell at the wrong time so be careful with share financing schemes.
Anyone interested to know more can just drop me a msg.

When you do margin financing you lose control of the asset and there is counter party risk.

The 3 Kings fiasco already show us that the financier like GS can sell or demand for top up anytime they deemed appropriate.

Those who use Lehman as custodian will have higher appreciation of what is counterparty risk. It is not just risk of losing the money, it is that the segregated assets will take a long time to get back while you continue to bleed. Then there is of course the classic counterparty risk as in MF Global.

Sharp tools have to be handled carefully and appropriately

if you get financing from local companies and banks from POEMS, HLF or Orix Capital, its generally safe and not much counterparty risk to worry about.
But as with all forms of leverage, the big risk is margin calls so like I said, you want to be very certain of where you employ your leverage into, and you want to give a big buffer zone so that even if it drops substantially in the near term, you wont get margin calls.
And even if you do get a margin call, you want to prepare such that you have holding power.
So leveraging up several times into a PENNY stock like what happened in the fiasco is a crazy suicidal idea to me.

Can you in theory use the leverage to purchase more KWC shares and use those for further leverage?

Yes of course.

(24-06-2014, 06:36 PM)GPD Wrote:

(24-06-2014, 05:36 PM)GFG Wrote:

(24-06-2014, 02:25 PM)specuvestor Wrote:

(24-06-2014, 01:56 PM)GFG Wrote:

(24-06-2014, 10:48 AM)Life is a game Wrote: Leverage. Its basically Margin trading. Pledge shares leverage lower and there is cdp transfer costs involved. Pledge cash higher leverage that's all. They charge you interest for the leverage amount and some other fees per quarter and annually.

?天堂与地狱?就在当下

Yup that's basically it

I get very attractive tiered rates, <3.5% while KW yield is ard 10% for me
So I earn on the spread
Plus the appreciation is tremendous this far

Danger is if you're not careful and don't have holding power, when you get margin calls you can end up having to sell at the wrong time so be careful with share financing schemes.
Anyone interested to know more can just drop me a msg.

When you do margin financing you lose control of the asset and there is counter party risk.

The 3 Kings fiasco already show us that the financier like GS can sell or demand for top up anytime they deemed appropriate.

Those who use Lehman as custodian will have higher appreciation of what is counterparty risk. It is not just risk of losing the money, it is that the segregated assets will take a long time to get back while you continue to bleed. Then there is of course the classic counterparty risk as in MF Global.

Sharp tools have to be handled carefully and appropriately

if you get financing from local companies and banks from POEMS, HLF or Orix Capital, its generally safe and not much counterparty risk to worry about.
But as with all forms of leverage, the big risk is margin calls so like I said, you want to be very certain of where you employ your leverage into, and you want to give a big buffer zone so that even if it drops substantially in the near term, you wont get margin calls.
And even if you do get a margin call, you want to prepare such that you have holding power.
So leveraging up several times into a PENNY stock like what happened in the fiasco is a crazy suicidal idea to me.

Can you in theory use the leverage to purchase more KWC shares and use those for further leverage?

I do think it is possible.

A UOB banker offered Olam bond (pre-muddy waters) and said that the investor can pledge the Olam bonds that were paid in cash to the bank to buy 80% more olam bonds and anytime there was a margin call (which the price of the bond dropped below the face value) the investor would need to top up, else the bank sells the leveraged/margin bonds.