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[URGENT] Anyone can explain this right issue?, Thanks.
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praveenmarkandu
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 Jul 11 2012, 10:56 AM
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Getting Started
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I have a question about this. Supposedly you can apply for more of these rights that are allotted for you (reason being some people might want to sell their rights or not exercise it).
The stock has already dropped around 10 sen when the rights issue was announced. The stock is now at RM1.03. After the 18th July when people get their rights as a discounted price of 0.83, a lot of people are going to sell to make around a 20 sen spread. How likely is this to affect the current price of RM1.03? Will it drop further after the 18th?
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praveenmarkandu
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Jul 11 2012, 03:09 PM
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Getting Started
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QUOTE(cherroy @ Jul 11 2012, 02:57 PM) Yes, in theory, it may affect the mothershare price after the right issue come out to the market as there are more shares than before. But those bought the right issue at 0.83, their cost is actually 0.83 + Amfirst-TR price (currently 17.5 cents), so they are not making 20 cents as claimed. Hmmm.... i was not aware that there was an extra 17.5 sen. I mean lets just say I own 1000 shares of AmFirst. So that would entitle me to 600 rights. I just assumed i could buy the 600 rights for 0.83 which is RM498 + some brokarage cost. Just to check my understanding, if I were to apply for more rights than i was allotted, i would have to pay the AmFirst-TR price of 17.5 sen a share? But the 600 shares allotted to me are free of that 17.5 sen? If i sell my 600 rights, im guessing im selling it at that 17.5 sen value |
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