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17-12-2012, 11:20 PM
(This post was last modified: 17-12-2012, 11:23 PM by l0nEr.)
(12-12-2012, 12:57 PM)greypiggi Wrote: (11-12-2012, 11:40 PM)arthur Wrote: While I am no bond expert, investing into Olam now is as good as punting.
To me, we choose a bond due to its safe nature and if there's a risk, however minimal, we should avoid at all cost.
I agree but if i did not already own OLAM bond i will take the punt. But i will classify this under my speculative portfolio and not my bond portfolio. So instead of buying equities to trade, i will buy use 50K to buy the 2013 Sep bond yielding 2.5% which current YTM should be about 3.5% since bond price is about 99. Borrow the other 200K at 0.8% interest. Do the math, effective yield on my 50K is (6250+2500-1600-500)/50000=13.3% assuming 1 full year and 0.2% commission when buying. Yield on this play is 13.3 which meets my speculative targets.
Risk? default is the main one but Temasek and owner already committ to raise 750M which will pay off all 2013 bond holders. Interest rate almost zero chance to spike up in 2013.
The only reason i am not doing this is that i own some olam bonds and have a rule to not have more then 2.5% of asset in any one instrument.
Digging up an older post...
Yes, i think the default risk for the 2013 seniors is very low, particularly with the liquidity and Singapore sovereign backstop. However, they are more expensive, so you pay for what you get. Pretty advisable but do know the risk when you are leveraging up. Btw think Olam bonds have more or less stablised, not much trading these days (holiday season one factor), no longer any emphasis on it anymore. The only thing people might perform relative valuation against now is the new 5-year debt (from the rights issue) that effectively gives a yield of about 11-12%.
Actually can check out other bonds (ask your RM) such as the Bank of East Asia (old style) Lower-tier 2. Old style bank debt is going to be rare next year due to Basel III...
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Fyi my 16 lots of borrowed olam shares were recalled today. Made just over a thousand dollars after all the hoohah - its a bit like betting on odd or even numbers of yellow cards in a football match.
But suspect the bigger shorts will get squeezed in next couple days.
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(18-12-2012, 10:11 AM)godjira1 Wrote: Made just over a thousand dollars after all the hoohah - its a bit like betting on odd or even numbers of yellow cards in a football match.
A good Christmas gift! 
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(18-12-2012, 10:11 AM)godjira1 Wrote: Fyi my 16 lots of borrowed olam shares were recalled today. Made just over a thousand dollars after all the hoohah - its a bit like betting on odd or even numbers of yellow cards in a football match.
But suspect the bigger shorts will get squeezed in next couple days.
The recall may due to up-coming EGM to vote for the right issue, and BCD for the right issue. I suppose shortish will cover the short in coming month due to massive recall.
One of the objectives of the right issue from Olam management? 
“夏则资皮，冬则资纱，旱则资船，水则资车” - 范蠡
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(18-12-2012, 10:11 AM)godjira1 Wrote: Fyi my 16 lots of borrowed olam shares were recalled today. Made just over a thousand dollars after all the hoohah - its a bit like betting on odd or even numbers of yellow cards in a football match.
But suspect the bigger shorts will get squeezed in next couple days.
Hi godjira1,
The borrowed shares were recalled today, your short position also have to be covered today, or you can cover it earlier than today ?
Thanks.
“risk comes from not knowing what you’re doing.”
I don’t look to jump over 7-foot bars: I look around for 1-foot bars that I can step over.
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I could have covered prior to today ( in fact yest would have made me 500 more).
But today I HAD to do it.
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(18-12-2012, 11:20 AM)godjira1 Wrote: I could have covered prior to today ( in fact yest would have made me 500 more).
But today I HAD to do it.
Thanks godjira1 for your reply. One last question;
When your 16,000 share were recalled, how do they inform you that you have to return the relevant shares ? Through your brokering house or.....
Thanks for your sharing.
“risk comes from not knowing what you’re doing.”
I don’t look to jump over 7-foot bars: I look around for 1-foot bars that I can step over.
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Temasek bought at least 24 million shares from open market in the last few days. more short squeeze coming?
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20-12-2012, 08:46 AM
(This post was last modified: 20-12-2012, 08:48 AM by corydorus.)
If I am muddy, once shares are released back, I will start to buy the mother share to take advantage on the bounce back. Take profit by shorting first then force olam and temasek to support, and then buy more of the mother share to enjoy the ride up. Afterwhich, another attack by selling to take profit again.
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(20-12-2012, 08:46 AM)corydorus Wrote: If I am muddy, once shares are released back, I will start to buy the mother share to take advantage on the bounce back. Take profit by shorting first then force olam and temasek to support, and then buy more of the mother share to enjoy the ride up. Afterwhich, another attack by selling to take profit again.
muddy moves shares in millions, just like temasek. These institutional investors can't move shares without notice. Though there tens of millions of shares change hand everyday. The genuine buy-sell is only in terms of millions.
When muddy buys back, every short will buy back. Muddy will shoot himself on the foot.
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