What is this creature called the redeemable convertible preference shares (RCPS) that will be traded tomorrow by RCE Capital ?
Interestingly, what is the basis of it being offered at 38 sen? How was this price arrived at? Pegged to what?
Questions abound.
I have just read the document circulated to shareholder today.
I have mixed feelings-really mixed like ABC (Air Batu Campur) or rojak buah (fruit cocktail). I just had that!
Let us go first to the price pegging at 38 sen. Interestingly it was arrived based on the then average trading price of RM 0 .445 sen which was then calculated to offer shareholders an incentive premium of 27.95 %.
Following their construction then, the all ex-bonus price will be RM 0. 297 sen.
But alas! RCE is now only trading at RM 0.305 and RM 0.31 sen.
The premium of 0.008 to RM 0. 018 cannot even cover the brokerage,stamp duty and clearing house charges.
How-lah Azman?
So, if you buy the RCPs, you already lose 7 sen gross.
Best to kasi buang semua tomorrow when it trades,right?
If you are thinking of that, make sure you have at 3.5 sen differential before dumping the documents.
Anyway, for your knowledge, the trading of the rights is only from 1st to 7th November.
After that you get saddled with these RCPS like a pony until 2019 !
As for the 20% dividend, itu belum tentu-lagi samada it will be declared or not.
The projected returns is nice at 5.26 % but for now it may be illusionary and a 'bridge too far'
For me, this is my quandary.
I have 500 shares, now I will have 750 shares in my CDS.
The number of RCPS, I am entitled to will be 300 RCPS.
I will have to cough up the following:
RM 114 for subscription
RM 5 for bank draft
RM 10 for revenue stamp
So, kena bayar net RM 129.00 for only 300 units.
Worth it, ah?
If not, can buy some more when trading starts tomorrow?
Nah!
With Astro screwing up everyone, I think most minority shareholders will rather keep their cash.
Malaysian security industry watchdogs are sleeping-lah!
Should be sacked en bloc!
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