It really punches through today!
After announcing a bonus of one share for every two shares held, London Pacific Insurance saw hyper-space action this morning ramping up its price to RM 20.68 for a RM 2.18 increase.
Tracing its share from the prior 13th GE period in 2013 to the effects of oil slumping in mid 2014 till today, the price did have short-term weaknesses every now and then but every time there was positive news, it ran ahead of the pack.
I expect some price correction as we approached the ex-date.
Assuming someone has 1000 shares, would it mean that he will be better off with an additional 500 shares at a new price?
His holding at current price is RM 20,000. If he sells it today, he will reap RM 20 K.
However, if he doesn't, then this will be his risk scenario.
If the theoretical ex-price is about RM 10.00 per share, then his holding of 1.5 K shares will be worth RM 15 K. He will then take on a paper loss of RM 5 K.
However, in the event that it ends at yesterday's price of RM 18, then his 1.5 K holdings will translate to a cool RM 27 K.
If and when this comes true, then it will one super bonanza of RM 9 K for such a holder!
So can this one Teh Hong Piow stock be the one with the kapow effect?
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