11-08-2014, 08:15 AM
With reference to following posting, I have sought further clarifications on when to mark short selling:
i) There is no need marking as long as they own underlying CBs, wrts with short selling with borrowed shares while waiting for conversion to take place...
ii) marking only required should they short sell borrowed underlying shares without longing convertible instruments
Sorry for the mistake
GG
i) There is no need marking as long as they own underlying CBs, wrts with short selling with borrowed shares while waiting for conversion to take place...
ii) marking only required should they short sell borrowed underlying shares without longing convertible instruments
Sorry for the mistake
GG
(10-08-2014, 09:24 PM)greengiraffe Wrote: Had a review of short selling on CMP to see if riskless arbitrage indeed took place between CBs and underlying shares. If professional arbitragers indeed conducted riskless arbitrage, the borrowed shares that they shorted ahead of the delivery of converted shares will have to be marked "short sell" and captured under the SGX data.
i) There are hardly any evidence for the past few weeks
http://www.sgx.com/wps/wcm/connect/sgx_e...140613.txt - 0
http://www.sgx.com/wps/wcm/connect/sgx_e...140620.txt - 4k
http://www.sgx.com/wps/wcm/connect/sgx_e...140627.txt - 75k
http://www.sgx.com/wps/wcm/connect/sgx_e...140704.txt - 67k
http://www.sgx.com/wps/wcm/connect/sgx_e...140711.txt - 8k
http://www.sgx.com/wps/wcm/connect/sgx_e...140718.txt - 3k
http://www.sgx.com/wps/wcm/connect/sgx_e...140725.txt - 4k
http://www.sgx.com/wps/wcm/connect/sgx_e...140801.txt - 5k
That means to say that the rise in share price post the revival of the Jiurui deal is the result of genuine buying and the clearance of overhang of converted shares from earlier conversion.
However, interestingly there has been a marked increase on 7 & 8 August:
http://www.sgx.com/wps/wcm/connect/sgx_e...140807.txt - 384307 shares
http://www.sgx.com/wps/wcm/connect/sgx_e...140808.txt -189k
Perhaps finally some professionals are finally at work in the light of rising liquidity due to recent conversion of CBs.
The continued conversion of CBs will continue to pose an overhang of CMP. However, with management's decision to lift interim dividends to 3.5 cents, it is indicative that the management remains confident that CMP's underlying cash generation strength will be able to meet the rising absolute dividend outlays as a result of steady stream of CBs conversion.
Vested
GG