Overseas Chinese Banking Corporation (OCBC Bank)

[retired1again]

It's rounding down your entitled rights to 1 right share.

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)?

[AlphaQuant]

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.

[pantoo]

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.

[AlphaQuant]

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.

[Porkbelly]

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?

[pantoo]

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?

[Porkbelly]

See post # 287 by Ngee:

INDICATIVE TIME TABLE FOR KEY EVENTS
Shares trade ex-Rights 25 August 2014 from 9.00 a.m.
Books Closure Date 27 August 2014 at 5.00 p.m.
Despatch of the Offer Information Statement 1 September 2014
Commencement of trading of “nil-paid” Rights 1 September 2014 from 9.00 a.m.
Last date and time for trading of “nil-paid” Rights 9 September 2014 at 5.00 p.m.
Last date and time for acceptance of and payment for Rights Shares 15 September 2014 at 5.00 p.m.
Last date and time for application and payment for excess Rights Shares 15 September 2014 at 5.00 p.m.
Expected date of issuance of Rights Shares 26 September 2014
Expected date of commencement of trading of Rights Shares 29 September 2014

[wsreader]

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.

[AlphaQuant]

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)

[pantoo]

guys, thank you so much for your informative replies!