Martin Lee @ Sg
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Capitaland Rights Issue

After weeks of market rumours of a rights issue, Capitaland finally announced their Capitaland rights issue yesterday. S$1.84 billion of capital will be raised through a rights issue at a price of $1.30 per share (At the same time, Capitaland also announced that their subsidairy, CapitaMall Trust, will be raising S$1.23 billion though their own rights issue).

Shareholders will be able to subscribe for 1 rights share for every 2 Capitaland shares that they own. The rights are renounceable (which means shareholders can sell them if they do not want to subscribe).

Key dates are as follows:

Shares trade ex-rights: 19th Feb 2009 from 9am

Despatch of offer document: 26th Feb 2009

Commencement of trading of Rights : 26th Feb 2009 at 9am

Last day of trading of rights: 6th March 2009 at 5pm

Last day and time for acceptance and payment for Rights Shares : 12th March 2009 at 5pm (930pm for electronic)

Last date and time for application and payment for excess Rights Shares : 12th March 2009 at 5pm (930pm for electronic)

Expected date of trading of Rights Shares : 23rd March 2009

If you are a Capitaland shareholder, it is imperative that you either sell off your rights (if you do not wish to subscribe) or subscribe to the rights. If you do neither, you would have lost the opportunity to recoup some money from the selling of your rights. 

Another option is to sell off your Capitaland shares before they go ex-rights.

Small shareholders who own odd lots of Capitaland would also be in a pole position to apply for excess rights shares, and make a small token (assuming no major collapse in the price). This profit comes at the expense of those Capitaland shareholders who neither sold off their rights nor subscribed.

Example:

Purchased 1000 shares of Capitaland at $2.50 (total cost $2500)

Option 1 (Subscribe for own rights)

Subscribe for 500 rights share at $1.30 each (total $650)

Average cost of 1500 shares = $2.10

Option 2 (Subscribe for own rights and excess rights)

Subscribe for 500 rights share at $1.30 each (total $650)

Subscribe for 500 excess rights share at $1.30 each (total $650)

Average cost of 2000 shares is $1.90

Option 3 (sell off rights)

Sell off 500 rights at $0.80 each ($400)

Average cost of 1000 shares is $2.10

Option 4 (Do nothing)

Average cost of 1000 shares is $2.50 (no change)

Note that while reducing the average cost of holdings might seem like a gain, it is not. The NTA/share of Capitaland would have fallen from $3.57/share to $2.80/share after the rights issue. So, each share is actually worth less. Doing nothing (option 4) would thus be extremely detrimental.

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115 comments
tang says 10 years ago

Sorry to bump into this link.

I have some questions with regards to Capcomm rights issue here.

1. Just to double confirm, there isn’t a need to mail any letters if the payment is made through ATM right?

2. I do not really understand the meaning of nil-paid rights and do not understand who is able to buy/sell rights during the nil-paid rights period.

I currently have some Capcomm shares. I understand that the shares through this right exercise will only be reflected in early July. So my question is, how do i purchase excess rights (beyond what i’m entitled to) or how do i sell part of my rights?

Reply
Peter says 10 years ago

Dear Martin,

My questiion should have read “I could not find the information on SGX website.” Sorry to the typo error

Reply
Peter says 10 years ago

Dear Martin,

I have an odd lot of 100 for CharteredSC after they consolidated my original 1000. I notice that there is a counter CharteredSC 100. Any idea when will be the last day of trading for this odd lot counter? I could find the information on SGX website. Thank you.

Peter

Reply
Naomi says 10 years ago

Hi there again.
I have another couple of questions and they are

1) why would company want to issue rights to the public at large and also

2) why would people want to buy the rights that are being issued out???

Thank you!!! Your help is much appreciated!!! !!!

Reply
Naomi says 10 years ago

What do rights closing date and rights trading period mean?
Can anyone help me with these questions! Need it badly. thanks.

Reply
    lioninvestor says 10 years ago

    Hi Naomi,

    Rights trading dates means the days where you can sell your rights (if you do not intend to subscribe).

    Rights closing date is the deadline whereby you need to accept and make payment to subscribe for your rights.

    Reply
atmdummie says 10 years ago

Hi Lion,

I am using Poems for my trading. How come even though I am alloted the rights. My number of shares in poems remains the same as of today (as though there was no increase in shares alloted???

Reply
    Worried says 10 years ago

    If im not mistaken (after reading through many of these same questions), it is because POEMS or any other online trading portal only keeps a record of shares bought through it. Those allocated to you are not shown but if you need to know how many you really do have, you can call the CDP (i think) or simply keep a record of any and all shares owned and try to keep up with updates on the companies that u’ve invested in (which is what i’ve been doing since i started). hope this helps!

    Reply
Worried says 10 years ago

hi lion, i bought sing holdings R and am asking if i can sell them as sing holdings R500. meaning i bought them specifically as whole lots but may sell them under R500 (overbought). will the deduction be from the general number of rights shares that i have?

Reply
    lioninvestor says 10 years ago

    Hi Worried,

    As long as you have not sold more than you own, that will not be a problem.

    Sing holdings R and Sing holdings R 500 refer to the same counter. The number at the end simply tells you the size of the smallest lot that can be traded.

    Reply
Peter says 10 years ago

Hi Lion, OK so using Chartered R100 is OK too. Thank you for your prompt response.

Reply
Peter says 10 years ago

Hi Lion,
I have sold all 2700 of my Chartered R using Chartered R100 as there are odd lots of 700. Traded date was 23 Mar 09. I received email acknowledtment from UOBKayhian. Clearance is 3 days I have checked my account no payment has been credited. My concern is that did I trade correctly can I used Chartered R100 to trade ? Thanks.

Reply
    lioninvestor says 10 years ago

    Hi Peter,

    If you are using giro or eps, the money should take 4-5 days to be credited into your account. If there is no electronic linkage, you can wait for the cheque to be mailed to you.

    Using Chartered R100 is fine.

    Reply
Nigel says 10 years ago

I have subscribed to the 1000 rights issued to me and also applied 1000 excess rights. I’m wondering, how am i able to check how much excess rights were issued to me?

Reply
    lioninvestor says 10 years ago

    Hi Nigel,

    You should have received a CDP statement in your mailbox on Saturday.

    Reply
Daniel says 10 years ago

Applied 2000 excess shares, got alloted 1000. Wonder what’s the criteria for the allotment of excess shares? Could it be 50%?

Reply
    lioninvestor says 10 years ago

    Hi Daniel,

    No, it can’t be 50%.

    There were 340,682,668 applying for 28,629,252 excess Rights Shares.

    I suppose in your case you had a complete lot of Rights Shares to begin with? Since priority is given to odd lot holders.

    Reply
Peter says 10 years ago

Hi Lion,
I have odd lots for Capitaland share from previous can’t remember how it came into being. Odd of 312 cab I just trade this 312 in the odd lot when it start trading? Or it need to be exactly 500?

The other way is I buy 688 to make up 1000 can I buy during the odd lot trading?

Thanks
Peter

Reply
    lioninvestor says 10 years ago

    Hi Peter,

    The special counter they setup is only for trading of 500 shares.

    If you want to trade 312 shares, you can always do so on the unit market. Note that liquidity is low though.

    You can call your broker to place the order (some firms might offer online).

    Reply
geo says 10 years ago

I know that a temporary counter will be setup for a month to facilitate trading of odd lots (500 shares).

A)What will happen to my 500 shares if I never sell it and the temporary counter closed after one month?

B)Will I be able to sell it later on after the counter closed?

C) Which date the temporary counter starts to trade?

Thanks.

Reply
    lioninvestor says 10 years ago

    Hi geo,

    It will be available on the date the rights shares start trading, on or about 23rd March 2009.

    After the counter is closed, you can sell it on the unit market.

    Reply
lioninvestor says 10 years ago

Indicative results show that the Capitaland rights issue has been fully subscribed. Therefore, those who apply for excess rights will be subject to allocation.

Reply
Help says 10 years ago

hi lion,

if i dont own any of the mothershares beforehand and i buy the rights during the trading period, i can still convert them to the mother share right?

Reply
    JeremyC says 10 years ago

    Pls take note that today is the last day to make payment for the conversions.

    Reply
    lioninvestor says 10 years ago

    See. And please see Jeremy’s comments too.

    If you don’t make payment by atm tonight (930pm), your rights will become worthless.

    Reply
      lioninvestor says 10 years ago

      I meant “yes” and not “see”.

      Reply
Vincent says 10 years ago

Hi Lion,
I just want to comment that your advice and information provided have been very useful for people like me in making decisions and proceeding with actions. Thanks.

Reply
    lioninvestor says 10 years ago

    Hi Vincent,

    Glad to be of help. You are welcome.

    Reply
Ken says 10 years ago

I don’t understand the “Expected date of trading of Rights Shares : 23rd March 2009”. If I convert my allotted rights to Capitaland shares and sold off the same amount of shares from my existing holdings, wouldn’t it be the same?

Reply
    lioninvestor says 10 years ago

    Hi Ken,

    Yes, it wouldn’t make a difference in the example you quoted.

    It would matter to those who wants to sell off more than their existing holdings.

    For example, if I have 10000 Capitaland shares and applied for another 5000 shares, I would be able to sell maximum 10000 of these shares before 23rd March.

    I will only be able to sell the other 5000 shares from then on.

    Main thing is to be careful not to sell off more than your initial holdings before 23rd. If I’m selling less than 10000 shares, it wouldn’t matter.

    Reply
      Ken says 10 years ago

      Thanks lion, it make sense now.

      Reply
Panic says 10 years ago

hi lion,

i am new investor, i just bought 6lots of capitaland R (Rights?) through poems and just found out that it stop trading last friday.

If i accepted and pay all 6lots rights share at $1.30, does that means i own 6lots of capitaland share converting from my rights share?

If it is capitaland share, will it expire again in future?
can i trade normally in poems as “capitaland” share?

according to poems they will clear the record from my account for the 6lot of rights share which i did not manage to sell.

if i sell the capitaland share (if i really entitle after paying $1.30) they will still be able to check records that i did own the shares right?

Panic

Reply
    lioninvestor says 10 years ago

    Hi Panic,

    You have until 12th March to pay and convert your rights into Capitaland shares.

    You will have to pay $1.30/share. Since you bought 6 lots, that will be $7800.

    After the exercise, you will end up with 6 lots of Capitaland. You will be able to sell these from 23rd March (expected date) onwards. You can sell them using any brokerage accounts. There’s no expiry date.

    It doesn’t matter what is reflected in your POEMS as they only capture trades done through their system. What is important is the records shown inside CDP.

    If you do nothing, your rights will expire worthless.

    Reply
      Panic says 10 years ago

      Hi Lion,

      Thanks for your explaination. i have a clear picture of wats all goin on. i will accept all 6lots via atm today.

      Panic

      Reply
atmdummie says 10 years ago

Hi lion investor,

I have no idea how to use my ATM to pay for the rights issue for capital land. I access it, but i really have no idea which options to go to. Can you kindly write a step by step for me?

I am using a POSB account.

Thank in advance!

Reply
    lioninvestor says 10 years ago

    Hi atmdummie,

    1) Put in card
    2) Key in pin
    3) More services
    4) English
    5) ESA-IPO/Share Investment
    6) Rights Appln
    7) Continue
    8) Select bank account
    9) Capitaland R
    10) Read and press continue (3 times)
    11) Key in number of accepted rights shares and press enter. Eg. If you have 2 lots of Capitaland and you want to accept all rights, key in 1000.
    12) Key in number of excess rights you are applying for and press enter.
    13) Check CDP number and press enter. If incorrect or not shown, key in CDP number and press enter.
    14) Check all details and press enter to confirm.
    15) Take receipt and card.

    Reply
      atmdummie says 10 years ago

      Thanks alot!!!!!!!!!

      Reply
      tada says 10 years ago

      Hi lion,

      I already have 2 lots of capitaland stocks and wish to apply for the rights. however, in ur step by step explanation for atm application, I keyed 0 for no. of accepted right shares and 1000 for no. of excess rights instead..

      is there any difference? if so, how can i revert it to acceptance instead of an application for excess rights?

      Reply
        lioninvestor says 10 years ago

        Hi Tada,

        The difference is that if you key in 500/500, you are guaranteed to get 500 shares (with the other 500 subject to availability of excess rights to be allocated).

        When you key in 0/1000, there is no certainty whether you will get any shares at all.

        The electronic application is irrevocable. If you submit the form, Capitaland will have to absolute discretion to allocate in whatever manner they deem fit.

        I suggest you call their hotline to check.

        +65-68233695

        Reply
        lioninvestor says 10 years ago

        Sorry I meant (for the first instance) when you key in 1000/0, you are guaranteed to get 1000 shares.

        Reply
          tada says 10 years ago

          Hi lion,

          thanks for the no.

          I tried calling and the operator says that if I get the excess rights, it’ll convert to mother shares at no additional costs.

          Meaning to say u only pay $1.3 for the share if you get thru on the ballot. Is this correct?

          If so, all shareholders will subscribe to the excess rights in view that the mother share will trade above $1.3, right?

          The limitation is that you’ll have to pay $1.3 upfront (so theres a resource limitation) and that shareholders with odd lots will be given preferences to round up.

          Is this understanding correct?

          tada

          Reply
          lioninvestor says 10 years ago

          Hi Tada,

          You are correct.

          That is why the excess rights will be subject to some form of balloting. You might or might not get all that you apply for.

          The normal rights gives a guaranteed conversion if you apply for it.

          Reply
anon says 10 years ago

Hi I am new to investment. My situation is as follows:

previously bought capitaland 1 lot @ $2.9 now being offered 500 rights shares @ $1.30

recently bought another 1 lot @ $1.89 (not entitled to rights)

what are my options if i decide to take up the rights? any implications whether my investment view is long term vs short term?

Reply
    lioninvestor says 10 years ago

    Hi Anon,

    Taking up your rights means you pay $1.30/share for another 500 Capitaland shares.

    If you do not want to do so, you should sell off the rights to get back some money. Tomorrow is the last day you can do so.

    Reply
alex says 10 years ago

What will happen if i Buy the Capitaland R rights in the open market?

Reply
    lioninvestor says 10 years ago

    Hi Alex,

    Then you will have to pay $1.30/share to convert them into Capitaland shares, otherwise they will expire worthless.

    Reply
    alex says 10 years ago

    Then in this case i have to pay twice? Once for the open market price and another for the 1.3/ share?

    Reply
      lioninvestor says 10 years ago

      Yes.

      Theoretically assuming no market movements, the cost of buying the rights and converting it should be the same as buying the Capitaland shares directly.

      Reply
alex says 10 years ago

Hi,

Any idea the mother share price will be diluted after 6th march?

Reply
    lioninvestor says 10 years ago

    Hi Alex,

    Part of the dilution has already been factored in. That is why you see the price drop after ex-rights.

    Reply
Jenniliesa Low says 10 years ago

Hi, I was given 5,000 rights by Capitaland. Despatch of information and application was send to my S’pore address.
Usually corresponding with CDP with my swiss address. Can
I sell my rights away in the open market.

Reply
    lioninvestor says 10 years ago

    Hi Jenniliesa,

    As long as you are sure you have them in your CDP, you can sell them in the open market.

    The counter name is Capitaland R.

    Note that the last trading day is 6th March.

    Reply
CK says 10 years ago

Hi Lion,

I have 3 lots of capland, so I will have 1500 right. I plan to buy 500 excess. my questions :

1) the capland R trading now on sgx, is it based on 500 or 1000? current price is about $0.625 ?

2) if the right trading is cheaper on sgx (based on current situation), what is the rational for us to subcribe the right? I rather buy it from open market.

Reply
    lioninvestor says 10 years ago

    Hi CK,

    Capitaland R is traded in 1000 shares.
    Capitaland R 500 is traded in 500 shares.

    The price you see is the price/rights.

    After you buy the rights, you still need to pay $1.30/share to convert them into the normal share. The overall cost will be similar to buying Capitaland directly, about $1.93.

    Reply
jane says 10 years ago

Just wondering how do I apply the rights via atm? I have 1 lot of capitaland rights offered to me now. Do I key in as 1 or 1000? While trying at atm, it indicated that I need to pay $2.60 of total application fee. In this case, am I paying purely $2.60 or $2600? I cancelled the transaction at the end as I was not sure how to carry out the transaction.

Reply
    lioninvestor says 10 years ago

    Hi Jane,

    During the electronic application, you will be prompted twice.

    The first time, enter the number of rights shares you are applying for. Assuming you have 2 lots of Capitaland and are given 1000 rights, you should key in 1000.

    And then you will be asked how many excess rights you want to apply for. Just enter the number of shares that you want.

    Eg.

    If you apply for 1000 rights and 1000 excess rights, you will need to pay $2600 for them. In addition, there is a $1 or $2 atm processing fee.

    Reply
adrian says 10 years ago

Hi,

I have 500rights in my CDP account

For option 3,

I can sell it at the open market under Capitaland R500 is it correct?
Is it based on the current market price example right now is 0.650?

Reply
    lioninvestor says 10 years ago

    Hi Adrian,

    Yes, that’s right.

    Reply
Daniel says 10 years ago

Hi,

Hv a question here.

Is the application for excess rights subject to balloting like in the case of IPO depending on investors’ response?

Can I still apply for excess rights if I have sold off the offered rights today?

Reply
    lioninvestor says 10 years ago

    Hi Daniel,

    There is some balloting involved but priority will be given to odd lot holders. Also, substantial shareholders will be given the lowest priority.

    Not too sure about the second question. If you go to the atm, you should be able to find out the answer.

    Reply
Chris says 10 years ago

Hi Jeremy,

I hold 1 lot of captial rights purchased on 17 feb 09 before EX R date.

1. Does it meant that i have 500 rights in my cdp account automatically?

2. If yes,how can i sell it? (under the open market captial R500 from 26 Feb? for example using my poems account?)

3. Can I also applied excess right 500 from the ATM if i want to round off to 1000 right? Will it automatically convert to a mother capitaland share.

4. If i manage to get the additional 500 excess rights , under which capitaland counter must i sell it? (Capitaland , capitaland R ?) and when can i start selling?

Thanks cause i am afraid i might make mistake and pay penalty for short selling.

Reply
    lioninvestor says 10 years ago

    Hi Chris,

    I’m not Jeremy but here’s my answer:

    1) Yes

    2) Yes. Capitaland R 500. 26th Feb to 6th March.

    3) Your own rights, if you do not sell it or convert it, will expire worthless. It will cost $1.30/share to convert to the mothershare.

    You also have the option of applying for excess rights shares. It will cost you $1.30/share to convert those rights to the mothershare. If you do get those, they will become Capitaland shares.

    4) You need to understand the whole process in order not to get confused by the terms.

    Capitaland -> Capitaland shares
    Capitaland R -> Capitaland rights

    Capitaland rights can be converted to Capitaland shares at $1.30 each.

    When you apply for excess rights, you actually pay $1.30/share to ballot for the converted shares.

    If in doubt, it is better to speak to your broker.

    Reply
      Chris says 10 years ago

      Thanks you, sorry for the mix up of on the name

      Reply
JeremyC says 10 years ago

Hi, have a few questions.

If i bought 1000 shares before XR, i should have 500 rights as of 26 Feb. However, if i choose to round it up to a full lot, meaning purchasing another 500 shares on the open market, should i get it from the R or R500 counter, and do i need to pay for the 500 shares ?

Or do i just have to pay $1.30 eventually to convert the rights to a mother share.

Thanks.

Reply
    lioninvestor says 10 years ago

    Hi Jeremy,

    the only difference between the Capitaland R and Capitaland R 500 is that the R 500 allows you to trade in size of 500 shares.

    So if you want to just buy 500 rights, that is the one you should go for.

    Converting your rights to the Capitaland shares will cost you $1.30/share.

    Another option is to buy 500 shares of Capitaland via the Capitaland 500 counter (it will be listed for a short duration after the rights exercise have completed) to round up your odd lot.

    Personally, I also have 500 rights. However, I’m not going to buy any more rights. I will just try my luck at applying for excess rights.

    Reply
      JeremyC says 10 years ago

      Icic.. I thought of applying for excess rights as well. Just wana have a plan B, just in case the application fails.

      Reply
Peter says 10 years ago

Hi Martin,
Today is just after 23 Feb as mentioned my CDP should be updated with my Rights issued. I have checked but no sign of the Rights in the statement. Just wonder if other ppl are facing the same? Or they have still not processed them. Your comment please. Thanks

Reply
    lioninvestor says 10 years ago

    Hi Peter,

    The rights only start trading on Thursday, so they should appear tomorrow.

    Reply
Dave says 10 years ago

Got some research from sources!

Beware! Rights issues could lose you money .

Don’t be in too much of a rush to buy
There’s about to be a rush of companies issuing new shares. And it could well be a trap for investors.

Companies use rights issues to try to tap their shareholders for cash by offering them first dibs on new stock offerings, normally at a chunky discount. And some analysts reckon this dash for cash is a harbinger of better times ahead. (More on that bullish view in a minute).

But this means more shares around – in markets already in dire need of help. Further, with many businesses so short of money, shareholders’ funds are a last resort.

Don’t get caught out by companies in trouble…

Companies across the continent rush to raise cash
Interesting. Here we are in the middle of a big bear market, yet according to Bloomberg the supply of shares in Europe is actually increasing for the first time since 2005. Some firms like zinc producer Xstrata and ceramic linings maker Cookson have already said they’re raising extra cash by selling more stock this year. It could be the start of a major trend. Goldman Sachs forecasts that companies across the continent are looking to raise some €300bn in 2009.

“Some of Britain’s biggest companies including Lakeside owner Liberty International and bookmaker William Hill will announce rights issues to raise billions of pounds within the next few weeks”, says the Sunday Telegraph’s Garry White, with Hovis and Mr Kipling cakes owner Premier Foods “planning a £400m rights issue alongside its results”.

Rights issues: what should we make of it all?
Several analysts think the imminent cash raising rush is a bullish sign. Looking at European companies with rights issues over the past decade, 72% of them improved their share prices in the next six months, says Royal Bank of Scotland. “Rights issues contain the seeds of their own success”, says Gartmore’s Adam McConkey, “improving prospects will see a significant improvement in the share price”. And Raiffeisen Capital’s Norbert Janisch says: “if a company gets into a position where it needs a rights issue, if it acts swiftly, the outcome can be positive”.

Sorry to pour cold water on all this optimism, but pull the other one.

UK companies are right under the financial cosh at the moment. As we pointed out in this week’s cover story week: Seven companies that will prosper in the recession (If you’re not a subscriber, get your first three issues free here) the latest numbers from the Bank of England showed that business cash is fast running low.

Corporate bank deposits dipped by nearly 5% in 2008 and the speed of the decline is accelerating. The year’s final quarter saw a near-2% drop, the biggest fall since the Bank’s records began over ten years ago. With the recession getting tougher, business cash balances can only get even thinner.

Rights issues are the last resort
So why are all these companies rattling the tin in the direction of shareholders now, rather then when their shares were two to ten times higher? (No misprint – Premier has plunged over 90% within the last two years.)

Either their corporate advisers didn’t think of the idea a lot earlier, in which case they should be sacked, or the companies themselves weren’t quite so desperate for money then. Or maybe both. But the need for money must be becoming pretty serious.

And why don’t these companies have a bash at raising the cash elsewhere? Presumably the banks won’t play ball – after all, they’ve enough troubles of their own without having to worry about the tedious business of lending to customers – but isn’t there talk of investors supposedly showing a renewed appetite for corporate debt?

Some firms have managed to refinance their balance sheets by borrowing in the bond market. But it’s not exactly been easy. They’ve had to pay top dollar for the money. What’s more, the market’s getting more nervous again – and much more selective. Virtually unnoticed, the cost of insuring against non-payment by some of the riskier corporate bonds has jumped in the last week almost back to its all-time high of two months ago. Default fears are back in a big way.

It all adds up to rights issues being more or less the last resort. And while companies that do succeed in cadging some extra cash off their shareholders may see a short-term share price bounce, it’s often driven by relief that these firms won’t be running into more trouble for the moment. And in this market, rallies soon fizzle out.

How to make sure you don’t get caught out
So what should you do if one of the companies in your portfolio offers you an apparently tasty opportunity to ‘snap up’ some new shares at a big markdown on the current price?

Be very careful. Don’t be tempted just by the discount. It may look large just after the rights announcement, but then the share price could well drop back a long way. If you think the company’s in good nick, and isn’t in dire need of the extra cash, it might still be worth subscribing for the new stock. But if the firm’s finances were looking dodgy pre-issue, it’s probably best to dump the shares anyway. In that case, if the price rises on news of the rights, cash in by getting out.

And for an example of how wrong things can go, remember HBOS. Its £4bn July 2008 rights offer made history by achieving the lowest take-up in Europe this decade, as shareholders claimed only 8% of the stock on offer after the shares fell below the rights price. Not only did the bank nearly go bust then, it’s now dragging down Lloyds as well.

Don’t get caught out like that…

Reply
Peter says 10 years ago

Hi Lion,
If I have odd lots of 312 on the top of the 5lots will I get Rights of 2500 + 156 rights? If so can I sell all i.e. 2556 Rights or only 2500 ?

Thank You
Regards
Peter

Reply
    lioninvestor says 10 years ago

    Hi Peter,

    You should get the additional 156 rights but I’m not so sure you can trade the odd rights.

    If you convert them, you can probably trade them on the unit market thereafter.

    Reply
alice says 10 years ago

I just bought the capital land share on 20 Feb 2009 10am. Do i entitled for rights issue?

If not, can I apply for the excess rights? (and how to do so…)

thanks!

Reply
    lioninvestor says 10 years ago

    Hi Alice,

    As Capitaland has already traded ex-rights on 19th Feb, you are not entitled to the rights as you bought the shares on 20th Feb.

    Unfortunately, neither are you eligible for the excess rights.

    Reply
XAVIER says 10 years ago

Hi :

1)I have Capitaland shares but I did not receive any offer document. What should I do?

2) Can I subscribe to any amount of the excess right? Does it depends on how much Capitaland shares that you are holding? Am I right to say that the application of the Excess right may not be successful. Is it base on first come, first serve basis? Meaning that I need to apply early for the excess rights to stand better chance of getting it?

Please advise?

Regards,

Xavier.

Reply
    lioninvestor says 10 years ago

    Hi Xavier,

    The offer document will only be sent out from 26th Feb.

    Priority for the excess rights will be given to odd lot holders, with substantial shareholders given the lowest priority. I didn’t read any mention of first come first served basis.

    Reply
Val says 10 years ago

Hi Lion,

I am not a Capitaland shareholder, but am thinking of buying the stock at value price. Would you recommend to wait now and observe the price after 25 Feb?

Reply
    lioninvestor says 10 years ago

    Hi Val,

    Note that any valuation of the stock price should take into account the share dilution.

    You should not be comparing the absolute price of the share pre and post rights because they are different.

    Reply
Xavier says 10 years ago

Hi Lion,

sorry for asking a noob question..

1) if i only have 1 lot, will i be able to get the offer document and subscribe for 500?

2) if i can get it, will i be able to sell 1500 shares in the future if i wan?

Reply
    lioninvestor says 10 years ago

    1) Yes

    2) There will be a temporary counter set up for people to sell 500 shares. Failing which, you can also sell it on the unit market.

    Reply
Oliver says 10 years ago

Can I subscribe for excess rights if I sell off my rights during the trading period?

Reply
    lioninvestor says 10 years ago

    Hi Oliver,

    I’m not quite sure about that. Perhaps you can check with their hotline:

    +65-68233695

    Reply
help?? says 10 years ago

Hi!

If i sold my mother shares on Thursday 19-Feb-09, will i be entitled to rights?

Thanks!

Reply
    lioninvestor says 10 years ago

    Yes ,you will.

    Reply
Andrew says 10 years ago

Hi there,

I have 1000shs of capitaland bought with my CPF. However, i currently do not have enough in my CPF to purchase the rights due to the new 20k minimum requirement.

If i were to subscribe to the rights using cash paying $650.00 or $1300 (if i were to purchase excess rights of another 500), when i sell that share that comes from the rights, would i be compensated with cash to my account or will it all go to my CPF.

What if i were buy another capitaland 1000shs with cash, i would still get only rights for 1000 shs. when i sell that share that comes from the rights, would i be compensated with cash to my account or will it all go to my CPF or would they split the payment equally.

Am a little confused on the situations above.
Please help.

Thanks

Reply
    lioninvestor says 10 years ago

    Hi Andrew,

    For Capitaland held in your CPF, your CPF agent bank will send you instructions on how to subscribe.

    What I understand (from the past) for cases like yours is that they will allow you to topup cash to your CPF investment account so that you can subscribe to the rights.

    Unfortunately, this topup is irreversible. Meaning when you sell the shares, the money will go back to your CPF OA.

    I am not sure whether subscribing to excess rights is allowed when your CPF minimum quota is not met. You will have to read the instructions given by your agent bank.

    Capitaland bought using cash would be treated separately from the Capitaland held in your CPF.

    Reply
Angela says 10 years ago

Hi there,

What is the tickel symbol for the right ? Is it tradable at size of 500 ? I am overseas and would have to trade my entitlement via the e trading system with my brokerage firm. I understand I can trade any time from Feb 26 – March 6 ?

Thanks

Reply
    lioninvestor says 10 years ago

    Hi Angela,

    Yes, the period you have given is correct.

    It will probably be something like Capitaland R 500

    Reply
      Angela says 10 years ago

      Hi Lion,

      My intention is to sell the rights since I am overseas during this period and it is too troublesome to subscirbe to the right shares.

      Please confirm I DO NOT need to sign or return any forms to CDP or Capitaland; the Rights will be automically credited to my CDP account after Feb 19 [ex right date]. I can just calculate my entilement which is 1/2 my shareholding today [say 10 lots ] and between Feb 26 – March 6, just execute a sell order for 5000 Rights [tickle symbol may be something like Capitaland R500]. The sales proceed will be deposited to my bank account registered with CDP. I do not pay anything apart from the commission fees.

      BTW, when will the tickle symbol be announced ?

      Thanks again !

      Reply
        lioninvestor says 10 years ago

        Hi Angela,

        If you can login to check your CDP account, you can confirm the existence of the rights inside after 23th Feb 2009.

        They can be traded from 26th Feb to 6th Mar.

        If there are any changes to the date, Capitaland will announce it.

        Are you a foreign shareholder (registered address with CDP outside Singapore)? They are not eligible.

        I suppose we can watch out for the ticker once they start trading.

        There’s also a hotline for further enquiries:

        +65-68233695

        Reply
lioninvestor says 10 years ago

The Capitaland offer document is out and can be downloaded here:

http://www.martinlee.sg/capitaland-rights-offer-document/

Reply
Ruth says 10 years ago

What would be the date that i should hold on to my Capitaland shares in order for me to be entitled to the 1-2 rights shares?

Regards

Reply
    lioninvestor says 10 years ago

    Hi Ruth,

    that will be the ex-rights date. ie Thursday

    Which means you have to be still holding them at the end of Wednesday.

    Reply
Peter says 10 years ago

Hi Lion, Mailing by registered letter from my experience will take at least 2 weeks one way. So may not be enough time. However by courier its not worth it will cost $50 to 70.
Worst case I will trade my rights base on the entitlement.
How then do I trade my rights? Can I just trade my rights when its open for trading based on what ratio i am entitled to must I pay for it first before I can trade ? Please advise?
Thanks and best regards
Peter

Reply
    lioninvestor says 10 years ago

    Hi Peter,

    You can trade (sell) the rights you are entitled to once they open for trading.

    There is no need to pay the $1.30 as it is more for converting the rights to Capitaland shares.

    Reply
      Peter says 10 years ago

      Hi Lion, Noted with Thanks. I ll have 2500 to be traded. As for the 500 do I need my broker to trade or I can trade all the 2500 at a go?
      Best Regards
      Peter

      Reply
        lioninvestor says 10 years ago

        Hi Peter, if the lots are traded in sizes of 500, then you will be able to sell them all at one go.

        Perhaps you can also check with your stockbroker whether there is any way they can help you with the application.

        Reply
Peter Chua says 10 years ago

Hi Lion,
I am now overseas working in Dubai starte recently. I usually buy my rights through the ATM so in this case can I get my daughter to buy on my behalf using the my POSB joint A/C if I transfer the money for the amount offered to me, I will give her my CDP A/c number will that work ? Must I used my main POSB A/c which she dont have accessed to.

Thank you.

Best regards,
Peter

Reply
    lioninvestor says 10 years ago

    Hi Peter,

    From the instructions given in the DBS offer document, it stated that application made via atm using a joint account must be used with the ATM card issued in the person’s name. If that is the case, your daughter would have to use your atm card.

    Will have to wait for the Capitaland offer document to see whether it is the same procedure.

    If you can’t make it back before the rights offer closes, another way is to get the offer document mailed to you, sign and mail it back.

    Reply
      Peter says 10 years ago

      Hi Lion,
      Thanks for the response. I was thinking worst case is that I trade my rights and sell them. So if I sell them should I first pay for the rights first when it opens for trading? Or can I just sell them based on my entitlement? Thank you for your help.
      Best regards
      Peter

      Reply
bry says 10 years ago

Hi Lion, I have 2 lots of CL shares at $3.3.

With the current low trading price, what would be the best option for me. would I be better off subscribing the right and average down my cost. Or should I sell off both my mother shares and not participate.

Reply
    lioninvestor says 10 years ago

    Hi Bry,

    If your original intention is to buy Capitaland as a long term investment, they you should re-evaluate the reasons why you bought and see whether they are still valid. If yes, then you probably should hold and consider option 2 or 3.

    If you bought it for short term trading, no one really knows the price after ex-rights date. You have to take a view (of what the price of Capitaland will be after ex-rights) and based on that, go for option 2 or sell off all before ex-rights.

    Reply
clueless says 10 years ago

hi lion again,i reread your post of the capitand.and i think option 2 is what i needed among those 4 option.of course maybe i will be selling of my 1 lot…

Reply
EZ says 10 years ago

Hi Lioninvestor

I noticed that the share price of CL went up from abt $2.3 to $2.6 and CMT went down from abt $1.5 to $1.3 after the announcement of their right issues.

What do you think the reasons behind it?

Reply
    lioninvestor says 10 years ago

    Hi EZ,

    One reason could be the market had already been expecting the rights issue from Capitaland for a few weeks, so there could be some short positions.

    Reply
Jing says 10 years ago

I understand the part that if I’m holding on to 2000 lots and i wish to for my own rights.

-> Pay $1300 for one lot of excess rights.

But let’s say, on top of that, i wish to subscribe for another 1000shares of ex rights. Can I do that? Do i need to pay any brokerage fees if i trade using POEMS?

Reply
    lioninvestor says 10 years ago

    Hi Jing,

    There will be an option to apply for excess rights shares if you own Capitaland shares. You pay the money upfront $1.30/share through atm.

    If you manage to get them, you can trade them subsequently like normal shares.

    Reply
      ben says 10 years ago

      Can I ask if I do not hold any Capitaland share, can I apply for excess?

      and if I do hold Capitaland share, but can I apply for more excess then I need?

      cheers

      Reply
        lioninvestor says 10 years ago

        Hi Ben,

        No, you can’t apply for excess if you do not own any Capitaland shares.

        And yes, you can apply for excess if you do own Capitaland shares.

        Reply
    clueless says 10 years ago

    hi lion,

    thanks for your reply.anyhow ,somewhere i still clueless and appreciate your effort to explain.

    i ask also at other forums,
    as i ask before,if i sell my rights to the market,does people want to buy since they need to pay the right money and after that need to top up another $1.30.
    isnt it better if they just buy the capitaland mothershare ?

    if i intend to apply for excess right as u reply to me earlier,where can i apply it?

    Reply
      lioninvestor says 10 years ago

      Hi clueless,

      The price is always a matter of demand and supply.

      If the rights trade at a low enough price, people will buy it to arbitrage.

      Eg.

      If the mother share is trading at $2.70, the rights should trade around $1.40. So there is no difference between buying the mother directly or buying the rights and then converting it.

      Imagine that the rights goes down to $1. People can now buy the rights, borrow scrips to short Capitaland and immediate book a profit of $0.40 (Excluding borrowing costs).

      So the price should converge.

      The excess rights can be applied at the same time you do your rights application. Either via ATM or using forms. Look out for the offer document which will be sent to you. It will have the details.

      Reply
cluless says 10 years ago

hi,
right now i have 1 lot only.bought at 2.70
if i intend to subscribe to the right at 1.30
so total my share will be 1500 shares, 2.70 +0.65

if i buy another right from the market,500 shares,how much i will be paying?somewhere,i saw they said 80 cent.i buy buy from sgx there 80 cent,after that what price i need to pay?

or better i buy another lot then make it 2mother shares+1 rights shares??

thanks

Reply
    lioninvestor says 10 years ago

    Hi cluless,

    the price of the rights on the secondary market will depend on market forces. Typically, it will be around the price of capital land minus $1.30.

    Eg. if Capitaland is trading at $2.30 after ex-rights, the rights should trade around $1.

    It will be traded from 26th Feb to 6th Mar.

    To convert your rights to the shares, you will require $1.30/share that you convert.

    You can also try applying for excess rights which is free if you do manage to get it. After that, you just need to spend $1.30/share to convert them.

    Reply
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