CIMB has issued a call warrant (CW) based on Genting Singapore PLC ('Genting SP') which is called GENS-C1. The main terms of GENS-C1 are:
1. Expiry Date: September 2, 2010
2. Exercise Ratio: 3-for-1
3. Exercise Price: S$0.98
GENS-C1 was issued at IPO price of RM0.15 and was quoted on the exchange on Friday, September 4. It gained RM0.135 or 90% on its first trading day. GENS-C1 closed at RM0.375 in the morning session today- gaining RM0.09 or 31.6%. Genting SP is trading at S$1.17 presently. Based on these prices & an exchange rate of S$1=RM2.46, GENS-C1 is now trading at a premium of 23%. The buyers must be very confident that Genting SP will successfully break above its 2007 high of S$1.20 (see my earlier post). I think it is not wise to pay premium above 15% for any CW, especially one which could fail to break above a strong technical resistance. AVOID GENS-C1.
For those who have a history of heart problems, keep the bullets and wait for a bargain in October.
ReplyDeleteI pretty convinced this month rally is for the big timer to offload.
While I am not confident on GENS as most of the flocks are chasing it because of the track records in home turf, Malaysia.
Have luck.
Hi Solomon,
ReplyDeleteI think we on the same wavelength with regards to a possible correction in the next few weeks. The market has entered a phase where the easy picking is over. Now, it is going to get tougher & this will separate the men from the boys.