tag:blogger.com,1999:blog-7417366406169637006.post2244930686004428211..comments2023-11-28T23:08:52.282+08:00Comments on A Malaysian Turtle Investing Diary...By Amateur for Amateur: BJToto-CD or BJ-Toto-CF?Unknownnoreply@blogger.comBlogger5125tag:blogger.com,1999:blog-7417366406169637006.post-6959757742481576632010-05-05T16:39:11.491+08:002010-05-05T16:39:11.491+08:00Want to punt on BJtoto call warrants? Today's ...Want to punt on BJtoto call warrants? Today's price: BJtoto=4.42, CD=0.05, CF=0.17.<br />I only recently explore the financial blogs which I found that I have learned a lot of things from you guys. I will find out later how to create my won blogs and share knowledge with others.<br />Lets look at some figures on CD and CF using Excel(Forget about CE because its risk-return is way too inferior to CD and CF). As I suggested before that dividend declaration soon will be a major factor on the reward on these warrants. Lets assume 2 scenarios, a dividend declaration of 30sen and 5sen respectively ex before expiry of the warrants. With 30 sen, CD's will probably 'go to Holland' as it is highly unlikely that the mother share can go up to RM4.87 (10% more) in 2 and a half months time. CF will have a profit of 2.3sen or 13% at that price on expiry which is more than 9 months away. That is the beauty of lower premium. On the other hand, if BJtoto goes up to RM5.00, CD can make 3.4sen per share, or 69% whereas CF makes 6.6sen, or 39%. That is the beauty of leverage.If the dividend is 5sen per share, CD will kaput unless BJtoto goes up to RM4.62 before expiry. The leverage effect will be similar. Because of the short duration of this CD, I kind of agree with Turtle and 'the Saint under the mountain' that it is not nice to play with CD as it is highly unlikely that BJtoto can go up to above RM4.62. As for CF, I differ from Turtle's opinion as I think CF is very nice to play. A leverage of 8-9 times is still attractive. Using option pricing model as a guide, CF is way undervalued, especially if the dividend declared is not too high.K Chttps://www.blogger.com/profile/02986490115485764028noreply@blogger.comtag:blogger.com,1999:blog-7417366406169637006.post-52970362536658752432010-05-04T20:20:38.980+08:002010-05-04T20:20:38.980+08:00KC,
Good comment. Do you blog? If not, do you con...KC,<br /><br />Good comment. Do you blog? If not, do you consider one? Drop me a note once you've decided. Your blog will be on my link.Turtleinvestorhttps://www.blogger.com/profile/16752180064759778036noreply@blogger.comtag:blogger.com,1999:blog-7417366406169637006.post-4892470011626392562010-05-04T18:24:45.592+08:002010-05-04T18:24:45.592+08:00I think the biggest risk in buying BJtoto structur...I think the biggest risk in buying BJtoto structured warrants now is the risk of BJtoto declaration of any high dividends like what happened last year when 30 sen dividends was declared, ex on 13/7/2009. This dividend which will be ex before the expiration of the warrants will lower the price of say CD by about 3 sen (10/3.73) which rendered CD practically worthless when it expires on 19/7/2010 as its intrinsic value now is only 1.4 sen (4.44-4.387)/3.73. Of course BJtoto share may run up on declaration of high dividend which may possibly increase the value of the warrants. It is hard to predict which way the price will go, but my guess the odds is against the warrant holders.K Chttps://www.blogger.com/profile/02986490115485764028noreply@blogger.comtag:blogger.com,1999:blog-7417366406169637006.post-75594252056892408802010-05-01T13:52:12.127+08:002010-05-01T13:52:12.127+08:00Correct, that is the exact message I'm trying ...Correct, that is the exact message I'm trying to say. In December '09 -CD was great, now we shall never go back to -CD. -CF? No, I'm not thinking of going back to any warrants at all for a while.Turtleinvestorhttps://www.blogger.com/profile/16752180064759778036noreply@blogger.comtag:blogger.com,1999:blog-7417366406169637006.post-41865012549965610762010-05-01T10:50:23.991+08:002010-05-01T10:50:23.991+08:00Hi turtle, just to highlight something also. Besid...Hi turtle, just to highlight something also. Besides CF not available at the time we buy CD, it should be note the mother price BJTOTO is kinda low at that time. If we are optimist,buying CD gives you a good return as its gearing good.<br /><br />But at this point of time, buying CD would not be a wise advise as time is our greatest enemy herepaperplaneinchttps://www.blogger.com/profile/02079944047256947092noreply@blogger.com