My Blog
Let’s Tikam Tikam AIMS [Final Update]
By Derek  •  April 11, 2014
In the end I was allocated 500 shares (175 entitled and 325 excess) based on the 1 lot I owned. I was not expecting to end up with odd lot. I'm not sure if it is due to SCB online trading or I own too few shares  to begin with. I called up SCB on how I could sell off my odd lot and was informed that I have to do so manually by calling into their customer hotline during office hours. After a verbal consent of a $25 minimum brokerage fee, they will then seek 'approval' before getting the broker to contact me. When probed further on this 'approval' procedure, I was told that some department head has to approve my request first. Here's a quick calculation of the entire exercise. Total shares owned: 1,500 units Total paid (including brokerage): $1955.38 Current Share Value ($1.330 as of 25 March): $1,995.00 Total profit / loss (including min: $25 brokerage): $9.83 Some key take away:
  • If I am allocated only with my entitled rights (175), I would have made a loss of 4.4% (after brokerage)
  • I am not expecting to end up with odd lots. This shows that the 1 lot strategy does not always work.
  • While one may end up with odd lots, I believe they will round it up to the nearest hundred.
  • If I were to own 6 lots before the rights issue and got (1.05 entitled + 0.95 excess) rights, I would have made a loss (after brokerage).
  • Using SCB online trading is a must to minimize brokerage fee.
While I comforted myself that a 0.5% for one month's work is not too bad, the risk reward ratio may not be justifiable to most. Fortunately, the price is reaching its pre-rights price and for those who participated just for the rights should be sitting comfortably on a small profit. You can read about the rest of the rights exercise here.
Read the full article
By Derek
Derek is an investor who follows Peter Lynch style of investing. He prefers to use simple and straight forward information for stock analysis. He started TheFinance.sg with the intention to bring together all bloggers and professionals who are interested or already in the area of Finance and Investing, and to create a community where everyone is free to write and to share their articles, experience and opinions.
LEAVE A COMMENT
LEAVE A COMMENT

Your email address will not be published.

*

Your Email Address will not be published
*

Read More Articles
More from thefinance