25-07-2014, 10:21 PM
(25-07-2014, 01:49 PM)greengiraffe Wrote:(25-07-2014, 09:36 AM)Jacmar Wrote:(25-07-2014, 09:02 AM)greengiraffe Wrote:(25-07-2014, 08:55 AM)Jacmar Wrote:(25-07-2014, 07:50 AM)greengiraffe Wrote: I encounter various similar response when I mentioned China Merchant Pacific to friends who are looking for quality investment ideas - "China - sure or not..."
Vested
GG
S-Chips has burned so many investors that it has given rise to shortist working actively against it. Even CMPH with so low free float and consistent high div yield is not spared. This explains the long history of share under performance by CMPH. The indiscriminate shorting is crazy and going to get them burn again. Anyway good for me as I get the extra 4% on top of the 7.5%.... cool. Thanks shortist and pls borrow from me some more. If you need more let me know and I will go and buy from the mkt to lend to you. hehe.
There is no outright shorting... Its arbitrage by professional traders - once they manage to long 1.25% CB, they borrow scripts to short while waiting for conversion. The main thing here is with increased supply of CMP, there must be secret admirers accumulating CMP alongside with buddies here - that can only be good...
GG
Hi GG, u need to explain to me how this works. U borrow at >4% and yr CBs gives 1.25%. In the process u are in the hole for a few % while waiting for the conversion. They can convert at any time now but why pay the extra % to wait for conversion.
They have their trading system set up for riskless arbitrage hence the process would have factored in the borrowing costs of the scripts - ie once they get the cheaper CBs, they will sell borrowed shares immediately while waiting for the converted scripts to be credited for the return of the borrowed scripts.
Hope that clarifies...
GG
How long does it take for them to get their converted scripts, a few mths and counting??