Showing posts with label FGV. Show all posts
Showing posts with label FGV. Show all posts

Wednesday, 21 October 2015

KL: FGV call warrants analysis

I traded FGV once -- on the first day when it was listed publicly. The IPO price was RM 4.55, but opened much higher on the first trading day. I bought @ RM 5.39 early in the morning. Seeing that the trend did not going well, I sold on the same day @ RM 5.40, incurring a small loss after brokerage fee. That was more than 3 years ago. Luckily I was determined to sell at that day, or else?

Now that FGV seems to rebound from the bottom. I am interesting to catch a rebound, thus I studied FGV call warrants.

*Credit to the Macquarie Group, an Australian based company, for having the very useful website Malaysia Warrants to enable me to summarize this in a few minutes.

Based on how I choose a call warrant, I look for CW with >180 days expiry. Thus the choice comes down to C6-C9. For low premium, FGV-C6 and C8 (newly listed) stands out. C6 has a lower premium and higher gearing but C8 has a lower conversion ratio. Although FGV-C9  has high gearing (also newly listed), the premium is way too high. Therefore, C6 and C8 will both be a good choice.

Both C8 and C9 were issued yesterday. Hence you can see the style of CW issued by different issuers. 

1. Macquarie exercise price is really high, while RHB is really nice.
2. Macquarie CWs always have relatively shorter expiry date.
3. A conversion ratio of 3.4 for a share price of RM 1.7x is too high. I am very impressed with the CW issued by RHB, for having such a low conversion ratio!

Disclaimer: at the time of posting, the author does not have any FGV nor FGV call warrants.