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Friday, April 16, 2010

LEE METAL GROUP W100910

I will be converting Lee Metal Group warrants around 4.5 months before expiry. Normally, I don't like to convert warrants way before expiry as I will lose time value for the warrant in question. But for this case, I will be paying 5cts per share to convert each warrant to share and getting back 2cts dividend in May. I guess it is worthwhile converting since I will be getting back 40% of my investment within one month.

I guess most of the other Lee Metal Group warrant holders will agree with me that the above is a good deal.

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25 Comments:

Blogger ZhuKoLiang said...

shifu,

then ask u... since u hold so many hundreds of stocks, then how u know each and every single one, when r they going to give out dividend, and hence exercise the company warrant?

Best rgds
newbie_George

12:39 PM  
Blogger ghchua said...

For dividend information, you can refer to SGX website.
http://www.sgx.com/wps/portal/marketplace/mp-en/listed_companies_info/corporate_action

For warrants, I use CDP online to display my holdings. After that, I use "find" to get the relevant information. For example, if I want to find warrants with expiry in Year 2011, I just need to do a find "W11". The warrant name contains the expiry date.

After that, I go to SGX website to search for more information on the particular warrant, including exercise price etc.
http://www.sgx.com/wps/portal/marketplace/mp-en/listed_companies_info/warrant_all-in-one_info

1:48 AM  
Blogger ZhuKoLiang said...

Hi shifu,

(i can't manage to pm u at sgfunds, so write here)

FSM recently introduce fees..

CPF quarterly also got fees..

WHat if... What if only... One day CDP implements fees!!!!!!! $2 per counter per month!!!!!!!!!!

if ghchua got 500CDP counters, 500counters x $2 x 12months = $12k per year!!!!

mmm, if sg birthrate continues to be so small, then in 50years time or so there are not enough sinkies defending sg, and when all prs are made compulsary to serve NS, they pack bag, say byebye go home, then sg gg... and when the whole nation gg, most likely economy gg, malaysia will try n makan sg, and soon, CDP gg, and both ghchua and newbie_George gg??

(by the way gg = good game. or means jialak)

Shouldn't we diversify outside countries? Maybe have 1 OX account, or 1 sexy saxo account.. 1 HK trading account.. etc..

PROs is: further diversification.
CONs: too many things to deal about..
how?
newbie_George

5:08 PM  
Blogger ghchua said...

Hi newbie_george,

If you are worrying about all these, then fixed deposit is also not safe. My job is also not safe. There is a certain amount of risk to be taken when investing in stocks and the key is really to think about risk management. I guess it is the case even if you invest in other countries.

CDP have the economic of scale as it is managing quite a lot of accounts. Therefore, I don't see them introducing fees for holdings yet. Anyway, I have been paying quarterly fees for my CPF Investment stock holdings. What I have been doing for my CPF Investment is to really do a subset of my CDP stock holdings so as to minimize the fees being paid.

The dividend received for my CPF holdings is more than enough to pay off those quarterly fees, so I am not too worried about it. I won't compromise diversification just because I need to pay fees per holding. Diversification is one of my important aspect of risk management and if I need to pay more fees for more holdings, so be it. But I must make sure that dividends is more than enough for pay off those fees, so that I know that it is sustainable in the long run.

8:55 PM  
Blogger Everlearning said...

Hi ghchua,

Today I encountered a new thing: to buy in US$ or S$. I chose the latter because I do not have a US dollar account with my brokerage firm.

Should I open a foreign currency account if the shares happen to be a different currency denomination?
Would you mind sharing with me your approach since you have various stocks in different denominations?

At times when I wanted to made a purchase, words like "restrictive counter" and my bidding being rejected. What does that mean? Does it mean that it cannot be purchased in the open market?

2:56 AM  
Blogger ghchua said...

Hi Everlearning,

I don't have foreign currency account with brokers or banks and therefore I settled in Sing$ for all my trades. Frankly speaking, most of the stocks listed on SGX are denominated in Sing$ and it is really not worthwhile to open a foreign currency account, unless you trade stocks in foreign currency frequently or you trade in other markets.

For a buy and hold investor that is only interested in SGX-listed companies like me, I only suffer exchange rate spread loss when buying/selling foreign currency denominated stocks and since I don't trade, it is ok for me to settle everything in Sing$ and suffer a bit of currency spread loss once in a while.

From what I understand, some counters like GDRs (i.e. Global Depository Receipts) denominated in US$ and listed on SGX can only be traded by institutional and accredited investors and not available for normal retail investors. Therefore, you are not allowed to trade these counters.

3:24 AM  
Blogger Everlearning said...

Hi ghchua,

Thanks for your comprehensive explanation on this issue of paying local or foreign currency for stocks purchased from SGX-listed companies.

It is far too advance for me to look beyond our shore to buy overseas' stocks.

I have tried buying stocks like SpWindsor and Dynamic but was rejected. So, these two stocks are really meant not for ordinary retail investors.

4:51 PM  
Blogger ghchua said...

Hi Everlearning,

I have bought SpWindsor and Dynamic Colours before using online broker and it is ok. Maybe you could call up your broker and check?

9:19 PM  
Blogger Everlearning said...

Hi ghchua,

There is no lack of stocks to buy in the market. So, I am not so diehard as to get these stocks but just puzzled why they have to put restrictions and restrains on these particular stocks.

9:28 PM  
Blogger ghchua said...

Hi Everlearning,

It depends on which brokers you are using I guess. Maybe you can try another online broker and see whether you can buy these two stocks.

1:44 AM  
Blogger Everlearning said...

Hi ghchua,

Won't it be too confusing to have more than one brokerage firms to handle our stocks investments? I like to simplify my records and have most of my stocks purchased from one brokerage firm.

What is this bonus share that CheungWoh going to give to the shareholders? I happen to have 4 lots of it, and have been contemplating of buying 1 lot in order to receive 1 bonus share from the company. Just wondering am I a little silly about my decision.

What would you do if you were in my situation?

12:05 AM  
Blogger ghchua said...

Hi Everlearning,

There is nothing difficult to manage in having different brokerage accounts. Afterall, everything links back to your CDP account which should be the place whereby you track your records, and not via your broker.

I don't think I will be buying shares just because they are giving out a bonus issue. Ultimately, it still depends on whether it is a good company trading below its intrinsic value.

7:23 PM  
Blogger ZhuKoLiang said...

nowadays there r really a lot of company trade below value @ Ass_G_X...

some coys in fact many, ipo in sg very high, then delist very cheap... then go HKSE ipo again...

Walao mannnnn wahhhhhhh!!!!!
=P

10:11 PM  
Blogger Everlearning said...

Hi ghchua,

All the while I have been tracking my records with Poems. I have not done once on CDP online. Just asked for password a while ago.

Thanks for your words of wisdom. I have in actual fact scrapped the idea of buying that l lot in order to get the bonus share. The reason is that the present share price is much higher than the intrinsic value as you clearly pointed out.

May I ask which brokerage firms are you using to purchase your stocks online? Hope I am not too abrupt?

2:51 AM  
Blogger ZhuKoLiang said...

ghchua got no broadband, so this question i help him answer.

u want to buy unit share, use poems online.

u want to buy normal S$ AssGX listed stocks, use DBSVickers cash upfront.

u want to buy US$ AssGX listed stocks, use limtan, pay by US$.

thank u.

newbie_George

4:53 AM  
Blogger ghchua said...

Hi newbie_George,

Thanks for helping me with the answers. Appreciate your help. :)

I guess for companies who tried to delist cheaply and list on another exchange (Examples like Man Wah and Want Want Holdings came to mind), we as minorities should come together and stop them. Their delisting resolution need more than 10% against to be defeated, but minorities only have themselves to blame if they cannot get together to vote out the unfair delisting resolution.

That being said, there are cases whereby these delisting resolution had been defeated. Examples like Tsit Wing, Full Apex etc are good case studies for minorities.

7:44 PM  
Blogger ghchua said...

Hi Everlearning,

I use DBS Vickers cash upfront account for most of my cash trades. Minimum brokerage is S$18.

For unit share (CPF and cash), yes, I use POEMS unit share trading. Minimum brokerage is S$10.

For CPF trades, I use Lim&Tan's eq platform as they offers reward points which I can use for contract redemption to offset my future brokerage charges. Minimum brokerage is S$25, but if you take into consideration the reward points, it is around S$23.

I treat brokerages as a platform for me to execute my trades. So, I use those that can offer me quick efficient execution and cheap brokerage.

7:50 PM  
Blogger me said...

hi,

i would like to know more about company warrant, assuming it is american warrant

1. On T day, i purchase the warrant over the exchange, then when is the warrant delivered to my cdp account?

2. If i'm now holding a cpy warrant, and decide to exercise it at X day, when will the converted share be delivered to my cdp account?

3. What other admin or transactions costs would be incurred?

Thanks....
ke

7:32 AM  
Blogger ghchua said...

Hi me,

Yeap. Most company warrants are American style but there are some which are European style as well (e.g. Technics Oil and Gas company warrant).

1. Same as shares, it will be around T+5.

2. It depends. Normally, if there is a corporate action soon (e.g. dividend payout, bonus issue etc), they will try to do it as soon as possible. It can be in a few days. However, there are some which takes as long as two weeks if there is no upcoming corporate actions.

3. You will need to buy a cashier's order to pay for the conversion. Cost per cashier's order is $3, if you use UOB internet banking.

8:22 PM  
Blogger me said...

hi ghchua,

Thanks for your input.

1. After I've purchase the cpy warrant, when or how do i convert to the mother share? Do i have to wait for some forms to be mailed to me?

2. Is there anyway i can read up more about company warrant? Most internet sites from the banks contain only structured warrants information.

Thank you once again

8:45 PM  
Blogger ghchua said...

Hi me,

1. If the warrant is American style, you can convert anytime during the life of the warrant.

For company warrant holdings under CDP, you need to call up the warrant agent to send you an exercise form. Fill it up, attach a cashier's order and send it back to them.
http://www.cdp.com.sg/faq/warrant_faq1.html

For company warrant holding under CPF and SRS Investment Accounts, you need to call up your CPF/SRS agent bank to send you a form. Fill it up and send it back to them. Do remember to make sure that there is enough funds in your CPF Investment Account/CPF-OA and SRS Investment Account/SRS Account to do the conversion. For CPF-OA, do take note of your CPF stock investment limit as well and make sure that the amount for conversion does not exceed the stock limit.

Do take note that for CPF Investment Account, there is extra charges from the agent bank and CDP.

2. http://www.sgx.com/wps/wcm/connect/mp_en/site/investor_centre/investor_education/investor_faqs/Alternative+Products/FAQ26

12:47 AM  
Blogger me said...

thanks thanks. these are the impt information i need.

3:22 AM  
Blogger ghchua said...

Hi me,

You are most welcome. :)

7:29 PM  
Blogger 梦中的文武英雄 said...

i am really sorry to post a question here but i really in a loss of who to seek for help.I bought China Printing & Dying few yrs back with DBS CPF investment acc.Now the share already delisted, but DBS still charge me service charge quarterly. I call to DBS but they told me to check with my broker (POEMS) , I call to POEMS but they say pls check with DBS as they are the one who charge me.... DBS said they will continue to charge me as long their record still show i hold the share. But the share has already been delisted and i can't sell it...Can anyone help? thanks

5:20 AM  
Blogger ghchua said...

Hi 梦中的文武英雄,

I am very sorry for the late reply as I don't normally check the comments in my blog except for the last few postings.

For your case, maybe what you can do is to explore the possibilities of transferring those shares out from your CPF Investment Account. You can write to CPF Board at investment@cpf.gov.sg about your situation and see what options they can give you.

I agree that it makes no sense for the agent bank to charge you quarterly fees for a company which is basically an empty shell and have not much chance of being listed again.

12:08 AM  

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