INSAS (3379) - No real correlation between Insas and Insas-PA
All the 3 Insas shares made some move today (see below). While that is
good for my holdings, as I do have all the 3 stocks, just wanted to
highlight that there are no correlation between Insas and Insas-PA.
I have provided some background on Insas-PA here and I want to be clear again of the following characteristics of the Preference share.
IT IS NOT CONVERTIBLE INTO INSAS SHARES. Insas-PA is redeemable at RM1.00 after 5 years. This means that the company - Insas - will give you back RM1.00 for every share that you hold. If you hold 10,000 shares of Insas-PA, they will pay you RM10,000.
In addition to that, it is paying 4% of dividend every year to you as a shareholder.
The only small correlation is that investors are more confident of the redemption by Insas with the upward movement of the share price.
The behavior of investors as they have gotten interested in the preference shares shows that the market is not efficient even in today's times when information is available almost anywhere.
On the other hand, Insas-WB has correlation to Insas as the exercise price is at RM1.00. Currently, it is out of the money - which is quite usual.
http://www.intellecpoint.com
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| Share price of Insas'es as at midday 9Apr2015 |
IT IS NOT CONVERTIBLE INTO INSAS SHARES. Insas-PA is redeemable at RM1.00 after 5 years. This means that the company - Insas - will give you back RM1.00 for every share that you hold. If you hold 10,000 shares of Insas-PA, they will pay you RM10,000.
In addition to that, it is paying 4% of dividend every year to you as a shareholder.
The only small correlation is that investors are more confident of the redemption by Insas with the upward movement of the share price.
The behavior of investors as they have gotten interested in the preference shares shows that the market is not efficient even in today's times when information is available almost anywhere.
On the other hand, Insas-WB has correlation to Insas as the exercise price is at RM1.00. Currently, it is out of the money - which is quite usual.
http://www.intellecpoint.com
