1 and 2 same answer,the single tier dividend are of the same category and it's not taxable in the hand of the receipient. No need to include in the income tax return.KLK should be more specific and state the dividend as " Interim dividend 10 sen Single Tier T.E."

3 is taxable in the hand of the receipient,must declare the gross amount and offset the Section 108 credit(ie the tax credit) against the tax payable.If you hold 1000 shares in Allianz,you will receive dividend of RM15 with tax credit of RM5.


I stand to be corrected.

I see. Will add this and read more about this.



Thx for your input. Will make the necessary corrections.

Yeah, I'm not planning to go into the details. Just want to provide a little background and some information so that forumers can understand what it means when they see the dividends declared.



I see. Thx for the info. I read your blog again and it was very helpful. Need to clarify a few things. Quote from your blog:



In your example, the dividend is : 10% less tax

So, 1000 shares of par value RM1 each, we will receive RM73.

My question is:
1) Is the "less tax" now 25%, 26% or 27%?
2) We only receive RM73, but why declared RM100? Is it because the RM27 was taxed?
3) If our income tax bracket was 13%, then we can claim back RM14 right? How do we claim this back? Is this the same as the "E10) Tolakan cukai seksyen 110 (dividen)" in the income tax form?
4) By looking at the dividend certificate (subsidiary income tax certificate), how do we know whether that dividend is taxable or not?

Basically, what I'm driving at is to understand the whole process and to explain it as simple as possible - from the point of a shareholder receiving dividend to how he file the income tax returns to how to claim back if the tax bracket is lower.

Maybe you can give a better example/explanation? Something like your example:

Company declare dividend of 10% less tax
You hold 1000 shares of RM1 each : Receive RM100
But 27% tax so actually receive only RM73
Declare RM100 as dividend during income tax filing
Tax bracket 13% so can claim back 14% (RM14)
Claim is through.....

This post has been edited by kmarc: Jul 8 2009, 11:10 PM

I'm thinking of challenging the topic of "Warrants". Will start on the topic soon. Hope you guys can help........

1.The rate varies according to the basis year,Y/A 2003 to Y/A2006 was 28 %,Y/A 2007 was 27 %,Y/A 2008 was 26 % and Y/A 2009 is 25 %.

2.The RM27 is the tax paid by the company to the IRB.

3.You setoff the RM27 against your tax payable and the unutilised amount will be refunded.

4.I don't use Nominee CDS so I have no idea on the subsidiary income tax certificate.Normal Dividend warrant is quite straight forward and it clearly states whether the dividend is taxed,TE or single tier.


As for the example/explanation,I am kind of lazy and hope other forumers can help you out.

Sorry for the late reply as I 've missed your post.

Thx for the info. Will update the thread later tonight.

Good answer
Something to add.
4. Nominee account dividend voucher might have 2 sections, one section stating tax information, the other stating charges etc, use the tax section for tax purposes.

Yeah, I have that 2 sections too. Just that I never submitted for income tax before so I don't really know what to do....

Warrant question.....


example in actual figure...

IOICORP = RM4.660

IOICORP-CI = RM0.005
Non-Collateralised American Style
Maturity date 03/08/2009
Exercise price = RM5.50

so 0.005+5.5 >4.66
Means this warrant is "tapau" <---- correct?


IOICORP-CJ = RM0.260
NON-COLLATERALISED AMERICAN-STYLE CASH SETTLED CALL WARRANTS
Maturity date 03/06/2010
Exercise price = RM 2.88

so 0.26+2.88=3.14 < 4.660
Means i can buy the mother at 3.14 + processing fee ?
the convert of mother share can be do it any time or until expire date?
if can convert now those ppl who buy warrant and convert to mother can earn big money ler.....
am i rite?


any pro can answer me?
if really can by just waiting for 2-3 week to convert is worth to try...

This post has been edited by chunjiet: Jul 19 2009, 05:59 PM

That's one question I wanted to ask too (among other questions). Have been struggling to do the guide about warrant with unfortunately minimal help from our forumers. Sad.... (A very big thank you to those who did help out! Maybe everybody busy making money.... )

Anyway, don't forget about the conversion ratio. It doesn't affect the calculation much but it should be factored in. FYI, IOICORP-CI conversion ratio is 0.20 while the IOICORP-CJ is 0.13.

I haven't addressed the "conversion ratio" part (and it's formula) in the guide yet. Will do it soon.....

This post has been edited by kmarc: Jul 19 2009, 10:06 PM

For CI, yes, tapau if its average price for settlement below 5.50

CJ
Generally, CW is cash settled, they don't allow you to convert to mothershare, but you can exercise it when it is in money, the extra money between the exercise price and market price will be paid in cash. You forget to take in conversion ratio, some may need 5, 10 or more CW to convert 1 mothershare. Sorry I don't know/check the CJ conversion ratio, but it is easily available info.

This post has been edited by cherroy: Jul 20 2009, 12:26 AM

Cherroy, the IOICORP-CJ's conversion ratio is 0.13.

So, if I understand it correctly, it means that 1 warrant can convert to 0.13 mother share @ 7.69 warrants to convert to 1 mother share?

(The 7.69 is from 1 / 0.13 = 7.69)

This post has been edited by kmarc: Jul 20 2009, 12:49 AM

0.13 is the rounded multiplier. Should be 0.125 since the ratio is 8:1.

Easier if you quote the conversion ratio in ratio terms like 1:2 or 3:1.

FYI IOICORP-CJ conversion is 8:1 meaning 8 warrants needed to convert 1 mothershare.

So to see if tapau or not;

(warrant price * conversion ratio) + exercise price =/= mother price

(0.26 * 8) + 2.88 = 4.96 ; therefore still have premium over the mother share.


Bursa page for all Call Warrant

I finally understood the conversion ratio. Thx!

Geee... I didn't even know you can check the warrant info from Bursa Malaysia....

CLEAR!!!!!!

means CJ also tapau unless u bought it now (0.26) and the mother raise more then 4.96++ correct?

Yes. Most call warrants trade with some premium especially those with longer life spans. Paying as little premium or no premium is desirable but not always possible.

Do not be trapped by looking at the conversion rate only . There are times on papers they look attractive ( by boosting the mother shares ) to get you to buy warrants to convert.

By the time, " they" push out the warrants , the mother share price falls.

Now that I understand more about warrants, I will only buy them if there is another major recession/depression.......

Oopsss, better continue my guide....

Margin Question

If i have 100k capital and margin another 50k in a stock.
The price for the stock is RM 1 .

Lets say the stock market are going down and the stock need decrease to what price then i need to sell all my stock to cover the margin??


Wish you guys can understand what i mean >.< Sorry

Not all, but have to be enough to maintain the margin.

Sifu, need your advice on this,

Say I want to buy call warrant of ABC-05 which currently is at USD0.10 and expiry date is May 2009, purchase total of 100 unit,

So cost to me is100 x xUSD0.10 = USD10 x 3.5 = RM35
Plus brokerage fee = RM12
Total cost = RM47

Say after 1 month price increase to USD0.20, if I sell it,
100 x USD0.2 = USD20 x 3.5 = RM70 – RM12 = 58

Is that how it’s calculated? From your tutorial, you mention that there is a target price, how do I see whether the warrant that I buy will reach the target price?