1. Scalp traded today :-
SUNREIT - bought RM1.08
????????? - got in another CW today, will be revealing tomorrow.
2. Long posting from hng on Malton :) Pretty make sense indeed.
hng // June 13, 2011 7:35:00 PM GMT+08:00
The main reason to buy Malton is impressive financial result, trading at undemanding valuation PE<5x.
Its corporate development to issue RCSLS and free warrant should work well to mother share as it avoid immediate dilution in equity. RCSLS is to issue at par value of RM1, coupon rate at 6% for 7yr, fund raising is to pare down borrowing cost which bear 8% interest and provide additional working capital. Free warrant is convertible at RM1 over 5 yr period.
At current level, Malton-LR at 19sen, Malton at 52.5sen, Lets calculate its value if investor buy Malton-LR instead of malton:
Cost
5 lot Malton-LR at 19sen = 95sen
2 lot RCSLS at RM1 = RM 2
Assume Market value
2 lot of RCSLS = RM 1.80
2 lot free Malton-WA = 40sen
1 lot free bonus Malton = 52.5sen
Remarks:
RCSLS will be trade at discount to increase its yield attractiveness >6.5% (Malton-LA: 90sen) , while warrant at maximum premiums of 200% (Malton-WA: 20sen).
Total cost = RM 2.95
Total market value = RM 1.80 + 40sen + 52.5sen = EM 2.725
Therefore, if investor wanan to gain from malton exercise should opt for Malton mother share instead of malton-LR. after fund raising Malton prospect should more promising as there is not only no dilution impact from RCSLS and warrant, and yet Malton balance sheet strengthen after this fund raising.
3. Market drop > 10 points, if DJ tonight green, tomorrow KLCI will follow, hopefully. :) Good luck all.
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