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Thursday, March 31, 2016

Parkson: A Mad Rush for Call Warrants

Parkson rallied sharply today. It made an intra-day high of RM1.11. 


Chart 1: Parkson's 30-min chart as at 31 March 2016_3.00pm (Source: ShareInvestor.com)

The rally in the share led to an even bigger rally for Parkson-CO & Parkson-CP.


Chart 3: Parkson-CO's 30-min chart as at 31 March 2016_3.00pm (Source: ShareInvestor.com)


Chart 4: Parkson-CP's 30-min chart as at 31 March 2016_3.00pm (Source: ShareInvestor.com)

Punters got carried away by the rally and chase Parkson-CO to a high of RM0.06. From the table below, you can see that Parkson-CO is out-of-the-money and is trading at a premium of 114%. Parkson-CP is trading at a more reasonable premium of 12%. Both CWs will expire on May 31- only 2 months away.


Table: Parkson's CW Listing Terms & Valuation

In view of the short period to maturity, you are advised not to take an overly bullish view of these two CWs. If you like to take a contrarian view on Parkson, the better approach is to get into the share.


Chart 2: Parkson's weekly chart as at 31 March 2016_3.00pm (Source: ShareInvestor.com)

Note:
In addition to the disclaimer in the preamble to my blog, I hereby confirm that I do not have any relevant interest in, or any interest in the acquisition or disposal of, Parkson.

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