From now until 18 Feb
Shares trade cum-rights (CR). It's just an indication that a rights issue exercise is ongoing. Whoever is still holding Capitaland shares as of end trading day 18 Feb will be entitled to apply for the rights shares at a ratio of 1 rights share per 2 existing mother shares. For example, if you are holding 2 lots (2000 shares), you will be entitled to apply for 1 lot (1000 shares). If you have 1 lot, then your entitlement is 500 shares.
19 Feb
Shares trade ex-rights (XR). The price will be adjusted to reflect the inclusion of your rights shares. For example, if it closed at $2.36 on 18 Feb, the fair price when trading starts today will be $2.01 (rounded).
23 Feb
If you were holding any mother shares before 19 Feb, the ownership will be registered in CDP by this date. Based on this record, you will receive your nil-paid rights (also called renounceable rights). These will be deposited into your CDP account before 26 Feb. Nil-paid rights give the owner the choice to accept the rights shares at the issue price of $1.30. You do not have to pay for your nil-paid rights, and they are yours to trade (sell) starting from 26 Feb.
26 Feb to 6 Mar
Trading of nil-paid rights begin. Because it's a 1 for 2 exercise, the smallest lot size will be 500 shares. So on top of a Capitaland_R, a Capitaland_R500 counter will be set up for trading. For shareholders who do not wish to pay more money to convert his/her rights shares to mother shares, this time window allows you to sell away your nil-paid rights. For shareholders who wish to round up odd lots, they may also choose to do so through nil-paid rights purchases here. For investors who were not holding any mother shares previously but now wish to participate in the rights issue exercise, they can buy these nil-paid rights. Theoretically, nil-paid rights will cost the amount of (mother share price - rights issue price). For example, if the mother share now trades at $2, the nil-paid rights should be trading at $2 - $1.3 = $0.70.
12 Mar
Those holding nil-paid rights have to pay up by this date ($1.30 per share) to apply for the rights. If you do not wish to subscribe, make sure you sell away your nil-paid rights between 26 Feb and 6 Mar. If you still have them as of this date, for whatever reason, pay up and apply for the rights issue. Don't be an *censored* and hold on to your nil-paid rights and not apply for the rights! You may pay up either via post (using bank drafts or money order, no cheques accepted) or ATM (CDP account should be linked, but note down your CDP account number for keying in manually just in case)
This is also the date by which excess rights applications must be submitted. If you are holding odd lots, my advice is to apply for the excess rights. Priority in excess rights allocation is always given to holders with odd lots.
23 Mar
You may begin trading your rights shares today. You will see them in your CDP account as normal Capitaland shares (code C31). To know the allocation results in advance, check your CDP account on 22 Mar, they should already be in by then.
Tuesday, February 10
Capitaland Rights Issue
Posted by
Kay
at
Tuesday, February 10, 2009
Capitaland is doing a rights issue and will offering its shareholders one right share for every two shares that they are holding at an issue price of $1.30. It is at a discount of around 40 percent from the closing price last Friday. Someone on the Channelnewsasia forum has summarize the important things that you should take note.
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Hi
ReplyDeleteWhat would be a fair value to buy capitalland shares taking into consideration of the right issues?
regards
aaw
Hi aww,
ReplyDeleteI have not done a financial analysis on Capitaland yet so I won't be able to tell you what is the fair value or the intrinsic value of Capitaland. In general, I supposed that since Capitaland is a property counter, once the property market recovers which occurs in tandem with the economy, Capitaland is likely to rebound from its low price now. Besides, I still perceive the market to be still undervalued now. Cheers.
Kay
Read the OIS from Capitaland website that the date one should hold the share should be 23/02 instead 18/02 in order to be able to apply for the 1-2 rights. Is it right?
ReplyDeletei m based overseas have no access of ATM machine to subscribe to the rights. can do via internet banking? if not i better sell off the rights
ReplyDeleteHi,
ReplyDeleteI have checked the rights announcement on SGX website. The ex-date is on 19th February while the record date is on 23rd February. Thus Capitaland will go XR i.e. ex-rights on 19th February. You will have to hold Capitaland shares until the 19th of February.
Hi,
ReplyDeleteI think the easier way is, if you can, get someone to apply for you using your account at the ATM. You might want to check out this forum thread at Channelnewsasia. http://forum.channelnewsasia.com/viewtopic.php?t=217975&postdays=0&postorder=asc&highlight=capitaland+rights+issue&start=0
Regards,
Kay
Just a layman question. As I do not have big chunk of cash laying around but very much interested in Capitaland- what kind of volume should I look for which gives me a decent return. Anyways, is it a good buy at a current price or as lots of people assume, will down a bit
ReplyDeleteplease show me the calculations for 2.01. thanks.
ReplyDeleteHi,
ReplyDeleteI don't understand what you mean by what kind of volume. It is very hard to say whether it is a good buy at a current price as it is very subjective. As for me, a good buy is when I can buy the stock of a strong company cheaply. Unfortunately, I have not done such an analysis for Capitaland yet so I'm not sure whether the current price is a good buy.
Kay
Hi,
ReplyDeleteAssuming closing price at XR is $2.36,
Theoretical price would be [($2.36 * 2)+($1.30 * 1)] / 2 = $2.06667 which is around $2.01 since the ratio is 1 : 2. I hope it's clear enough.
Kay
hi!
ReplyDeleteis there a typo error? should be divided by 3 (not 2), ya?
bye...
Hi,
ReplyDeleteSorry, that's indeed a typo error. Should be divided by 3.
Kay
hello,
ReplyDeleteanother thing, the rounding up would be 2.07 (not 2.01)?. in school we were taught if third decimal point more than .5 to round it up at 2nd decimal point. so 2.06666 rounds up to 2.07? or is it that for stock exchange is different way of rounding up?
don't mind me....
btw, to continue, i bought capitaland and looking at the way things are going today, i think i am going to be 'burnt' to a crisp! on hindsight, my timing was bad.
ReplyDeleteHi,
ReplyDeleteOh dear, I made another typo again. The answer is 2.00666667 which is a recurring decimal. I am short of one more zero in my computation.
Don't worry. It's not that bad. If you can hold it, I think it's alright once the property market recovers. All the best to you and I hope you can earn some profits.
Kay
Hi,
ReplyDeleteBy 12 Mar, if we do not pay up for the nil-paid rights, what will happen?
If I don't pay, will SGX force-sell it for you?
Hi,
ReplyDeleteIf I'm not wrong, according to the OIS, if the payment is not received, the provisional allotments of the rights shares will be deemed to have been declined and will lapse and become void. It will then be used to satisfy excess applications.
Kay
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