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Wednesday, May 1, 2013

MAS (3786) ~ 4 rights for every 1 existing share @ 0.23

MAS price is currently @ 0.68




Finally MAS announce the rights issue on 11 April 2013 - every 1 existing share will get 4 rights @ 0.23.

Below shows an example for the changes, say:

You purchased 1,000 shares at 0.825 (closing price on 11 April 2013) = RM825
Average price = approx. 0.35 after all rights subscribed and based on 0.825 closing price 

Option A) Subscribe all rights
4,000 rights @ 0.23 = RM920 + RM825 = RM1,745
Average price for the remaining 5,000 shares = 0.349

Option B) Sell all rights
4,000 rights @ 0.12 = RM480 - RM825 = RM345
Average price for the remaining 1,000 shares = 0.345
(assumed 0.12 is the price Buyer willing to offer) 

4,000 rights @ 0.35 = RM1,400 - RM825 = RM575
Average price for the remaining 1,000 shares = 0.575
(assumed 0.35 is the price Seller willing to accept) 

Option C) Do nothing
Average price = 0.825

*Please note that above just a quick calculation excluding all transaction charges etc.

Make sure you have enough cash ready to subscribe all rights or sell your rights before the closing date. Normally if you go with Option A or B, your end figure will be about the same. Never go with Option C.

Research company view (After announced of Rights Issue):

RHB Research Institute ~ ex-rights fair value 0.50
Kenanga ~ target price 1.01 and 0.39 for ex-rights shares
Alliance Research ~ target price 0.68 sen and 0.32 on an ex-all basis

Based on current rights issue offer, the average cost per share for Khazanah should be approx. 0.60.

To me ~ I'm hoping after all rights subscribed main share will reach 0.60

Good luck with your investment!!! ^_*

Again as mentioned in my previous post, One main point is MAS have stop paying out dividends since 2008. If you are not risk taker, you should consider put it in the bank for FD and get around 3% interest per annum [Link for Banks FD Rates].

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2 comments:

  1. AnonymousMay 7, 2013 at 5:12 AM

    Hi Adrew,

    I do not understand Option B second part.
    4000 rights @ 0.35. Can u explain?

    ReplyDelete
    Replies
    1. UnknownMay 7, 2013 at 9:21 AM

      You are correct, it should be:

      4,000 rights @ 0.35 = RM1,400 - RM825 = RM575 profit
      For the remaining 1,000 shares, say sell at 0.35 = RM350 profit
      Total profit = RM925
      (assumed 0.35 is the price Seller willing to accept)

      Anyway this one will not happen as normally no one will willing to offer higher price for Rights as they still need to add 0.23 per share to subscribe it.

      Delete

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