Yes, warrant exercise price normally will be adjusted according to extra shares being given out (like bonus, rights, share dividend etc) so that warrant holders has equal treatment throughout except for cash dividend.

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Added on September 29, 2008, 9:10 amYes,

But you lose your gearing advatange of a warrant.

But you gain interm of getting cash dividend.

As it is one of dividend stocks, so normally warrant for dividend stocks will be discount a bit as warrant holders can't enjoy those cash dividend and while when stock price being ex-dividend time, share price will be adjusted downwards which is a disadvantage factor for warrant.

This post has been edited by cherroy: Sep 29 2008, 09:10 AM

It depends, can't say which one is better totally. Different comparison.

YTLpower - involved in Wessex and IPPs, so earning wise is quite predictable.

YTL - as a group and construction related, earning wise can shoot up quite fast in good time so does share price might appreciate more than YTLpower when market good time.

Not necessary mother or son wil run faster, it depends on individual company financial and prospect issue.

This post has been edited by cherroy: Oct 4 2008, 10:14 AM

I don't know YTLpower has buyback how many shares already, just know YTLpower has buyback substantial numbers of it.
Just buyback has its limitation, it can't exceed the 10% of total outstanding shares.

Yes, valuation in GBP still the same.

But for accounting purposes and real transalation into profit, it would be less in term of RM which by any accounting standard, YTLpower need to realise it in term of RM wise as it is reporting in RM financial book.

Valuation can remain the same, if company doesn't opt to revalue it in their balance sheet, but profit wise can't.

Yes, in real term, they can opt not to convert the GBP back to RM or send back to Malaysia and keep in UK. (which is norm pratice and most applied by overseas venturing company).

But in accouting standard, they need have paper realisation of it. Just like you company in UK is earning 100K pounds, then how you report in your annual financial result? Surely take 100k x GBP rate (let say 5.80) = Rm580K at the end of the financial calendar.

So if one day in the future, company decided to convert it back to RM and send back to Malaysia, but rate is different, not 5.80. So if it is 6.00, then extra 20K being pocket as profit (extra-ordinary profit or exchange rate profit etc defined by the company account), while if it is 5.60, then resulted in 20K loss in the financial book afterwards.

But when reporting their annual financial result, they need to have paper realisation.

Yes, for fixed asset under balance sheet, if company doesn't opt for revaluation, it can stay at same valuation figure.

Aussie & NZ no good for the last few month and potential in near future. But over the last few decade, RM actually depreciated against them even at current 2.3-2.4 level.

With this statement, it has already showed that having diversificaiton of asset in others developed countries in the denomination of major currencies is indeed a need.

No, I disagree on this factor (not mean GBP won't rise or plunge), just olympic or not won't be a major factor in determine the currency, economy or stock market. It has to do with macro-economy and external factor. Currency is sensitive to interest rate and economy growth and health of country financial situation. It (olympic) has some stimulus effect but it is not the major driving force.

We had enough previous myth or popular talk of buying China stocks because of Olympics, which I find a lame excuse long before. Sorry no offence.

As long as the warrant has not expired, then yes.

Even at 0.005, it is still not make sense to sell in few lots. 10 lots (x100) x 0.005 = Rm5., minus min commission (Rm8.88 or Rm12 or Rm28 or Rm40), you still ended up with -ve figure. What for?

This post has been edited by cherroy: Oct 23 2008, 11:31 AM

Just for info, depended on company, some warrant being converted to mothershare will not rank parri passu (same status) with the mothershare in the first year after being converted aka, not entitle the immediate coming dividend declared. So, in this case, you need to wait the second year before can start enjoying the dividend.

But it depended on company policy when setting the warrant term time. But most nowadays, warrant being given or set at rank parri passu when being converted.

Yes, you concern is perfectly reasonable, as YTLpower share is generally quite stagnant most of the time. That's why warrant being traded on par with the mothershare valuation or sometime slightly discount.
By right, for normal circumstances, warrant should trade at slight premium because of gearing.

Yes, one view mothershare price is going to be stagnant, then surely convert is the better option as it erodes the value of warrant.

So it basically the consideration is simple.

1. If you view mothershare going to be stagnant, then convert
2. If you view mothershare will be appreciating, then stay with warrant, as warrant generate more return rate when mothershare is rising due to gearing factor.
3. If cash and individual liquidity is tight, then go for warrant as it provides you the gearing factor as you need lesser capital to enjoy the nearly the same amount of return rate with mothershare, but have to consider factor (1) also.

So you already find out and confirm the converted warrant will not ranked as pari-passu with the mothershare?

It should be, most of the time as far as my experience tell me, although can have exception which depended on company.

Yes, I share with your view too. At 6.5%, it might not boost the company earning much, considered that borrowing cost should be at least around 3-5% range.

Long term, definitely might be good as those asset is not something can be acquired easily in the market nor can be set up as wish. <-- this might be the main reason. As strategic of business is always the priority which will be good for long term earning, not short term benefit.

So, it is not a short term benefit, considered that worldwide slowing economy which will dampen the electricity usage.
Good side is, fuel price is dropping.

This post has been edited by cherroy: Dec 3 2008, 09:31 AM

Yupm It is one of the most lucrative business and without much risk.

You don't worry about the selling price, you just produce max out and waiting the cash to roll in.

I don't understand what you mean exercise price adjusted upwards?

Exercise price of warrant is fixed unless there is bonus issue, right issue or stock split etc which has to do with the shareholding issue by then exercise price will only be adjusted.

If there is no issue affecting share number issue, exercise price is fixed throughout the warrant lifetime.

If there are stated T&C of the warrant, when the warrant first being launched time, yes, possible.

But generally in the market warrant exercise price is fixed throughout in the market, (still can vary, there is no law or regulation that they can't be varying exercise price), this is a more special case/condition for warrant.

Interesting to know more about it. So if your statement is true, it means it will increase 2 cents annually.

If like that, it is totally disadvatange (exercise price increment annually and dividend on mothershare) to have WB in the first place, no wonder it is always trading at discount.

It is not good for venture into high capex business while has no foresight on profitability issue mainly because until now, no one knows Wimax can be a profitable or highly proftiable business to run with. Bare in mind, it needs to face huge competition from TM especially with TM will be running HSBB gov project.
But they have to roll out the Wimax because it is the license requirement, if not roll out, license can be revoked.

This news particular not good for YTLP which expertise is in Power generation and utilities business, that's why its share dropped after this news/rumour, because market view, cashflow of YTLP is tapped on.
It makes sense for YTL group to choose YTLP because YTLP is the one with significant cashflow generation constantly which able to support the capex of Wimax. But shareholders might not like it, if the Wimax business doesn't contribute much profit.

Wimax will have lot of penetration in future broadband market, but profitability wise still remain a huge question especially this could involve massive high capex business to run, that's the major concern.

You already stated 'minority'. Anything combined stake less than 49%, nothing much can do about it.

This post has been edited by cherroy: Sep 5 2009, 12:21 AM

Yup, have to agree on this, Malaysia market is too small.

For broadband, we have
1. TM's streamyx, and future HSBB
2. 3G by celcom, Maxis, Digi
3. Free Wifi around
3. 3 Wimax companies (4?, I can just remembered 3, correct me if I am wrong)

Too many players around.

Gpacket has publically said they target and project 200K subscribers for make profit out of it. How many 200K subscribers can be there to tap on?
Until now, streamyx just having around 1 million subscribers base with monopoly and pioneer in broadband only.

If this is a case, this is no win case for YTLP to give loan to YTLE, inter-company loan is something very bad perceived by the market. (remembered the Bjland and Bjtoto inter-company loan saga which lead Bjtoto share plunged from 8.00 to 4.xx)

If YTLE can paid the interest, it means Wimax business generates enough cashflow and potential profit to the company. In this case, might as well run under YTLP as mor reward to YTLP shareholders.

If the Wimax business is not viable, then YTLE cannot potential pay the interest (or may be can as even make loss, some company still able to generate cashflow) but definitely not able to repay the initial borrowing.

So both doesn't seems favourable/win to YTLP.

Fundamentally, if Wimax business is highly profitable and YTL group want to tap cashflow of YTLP then better run under YTLP. The issues arise because huge cashflow will be drained, while no foresight for the profitability. People invested YTLP mainy for its utilities business which generate steady cashflow as dividend play. So if cash being drained, investors will worry about the cashflow and dividend ability, that's why we see some selling pressure after the rumour.

With the license means they must run already, if not license will be revoked by the gov after a period of inactivity.

If it is indeed Rm2.5 billion loan went to non-profit business which is to help YTLE alone to roll out Wimax, although EPS is not affected (it won't affect EPS figure), investors' confidence of corporate governance and benefit will be affected, and share price could trade less premium compared to previously. The share price dipped after the news come out mainly on corporate governance issue, which nowadays is an important issue and more awareness among investors nowadays.

It is still a good stock.

But if this deal indeed go through and affected the dividend ability, then need to have some review on it because this stock is mainly dividend play.