Genting SP- more CWs issued

Today, we have the listing of the 3rd CW for Genting SP. It is called Gens-C3 and it was issued by CIMB. Five days earlier, we saw the listing of Gens-C2 which was issued by OSK. The first CW for Genting SP, Gens-C1 was issued by CIMB on September 4th.

Why the flurry of new issue of CWs for this stock? Why are these CWs trading at such high premium, ranging from 21% to 43%? As you may already known by now, Genting SP is having a large Rights Issue of 1-for-5 at S$0.80 each which will close on October 12th. For some reason, Genting SP is currently trading at nearly the same price as it did on the last cum date for the entitlement for the Rights Issue, i.e. September 17th. There are two ways of looking at this development: It is either a very positive development for the stock, which may justify the high premium commanded by 3 CWs or the share price is being held at the current level. I would not want to say more on the later scenario, but I think it is interesting to note the flurry of new CWs issued based on Genting SP. These "smart moneys"- CIMB & OSK- are not too enamored by Genting SP's medium-term share price performance & thought issuing or writing CWs for Genting SP is a rewarding exercise. Who is right? The "smart moneys" or the retailers buying these CWs?


Table: Gens-CWs' main terms & their premium computation

I have appended below the chart of Genting SP for your easy viewing.


Chart: Genting SP's weekly chart as at Oct 5, 2009 (source: Yahoo Finance)