Now, this is what I did on the same day - today.
|Sold Padini and Bought SP Setia|
In my previous article less than a month ago, I have mentioned of the scenario surrounding the share price and its warrants. I guess many did not really catch my reasoning as I did not reveal many things. Surprisingly to me this is one of the least read article despite me doing a lot of work on this.
However, as I am taking action, I am just going to say more of what I have found previously actually. Now look below and if you read again the previous article...
|About 28 million of the warrant did not take up the offer - hence still in the free float|
|Exercise of warrants by PNB|
Full exercise of the warrants would have diluted the NAV of SP Setia but since it is now trading at around RM3.12 and the exercise costs of the warrants is RM2.99, I would think the dilution is not worrying. Anyway, as I have mentioned before in the previous article, the private placements and ESOS would have a bigger impact in terms of dilution. There are even bigger question marks in both the Private placement and ESOS themselves as the shares are being bought at RM3.95 while warrants bought at RM0.96. Assuming the private placements and ESOS (both 15%, hence totalling 30%) are issued at discounts of say 10%, some people would have gotten the shares at very cheap.
The discounts would have diluted the value of SP Setia's shares but I could not understand the reason for the sudden drop in share price to now RM3.12. If I am PNB, I definitely would not want to issue more shares at below my purchase price during the General Offer. However, we know that sometimes share price can be influenced to attract certain shareholders during exercise such as this - you know why most of the time I do not quite like private placements, rights etc now?
As a result, I think SP Setia's underlying value (I think the major shareholders would definitely know more) would have been much higher than RM3.12 which is why I am just buying 2,300 units. Not a lot.
Whatever your trade on these counters mentioned above are solely your own decision as I am just providing my opinion and I may be wrong. Please do your own research as some of my calculations may not be correct!
BTW, did not notice EPF just no longer become a substantial shareholder of SP Setia. I wonder why as EPF just had a big project with SP Setia - it no longer believes in SP Setia? Then such a big project as in the Battersea project where both EPF and SP Setia together invested a lot of money into it...how ahh? EPF surely is not the developer...