lessons learnt from MARA RIGHTS issue

babytrader · 1 lessons learnt from MARA RIGHTS issue Sun Apr 03, 2011 1:01 pm

babytrader

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As a beginner to the stock market, before finding this forum i had the wrong impression about purchasing rights and the fact that i have to pay additionally to get the stock.

Anyway luckyly i only had to pay a small price for this learning experience Smile

.

I still have some questions though. so lets take the case of MARA RIGHTS issue

I actually had some MARA stock to which i got a letter to purchase RIGHTS.

MARAWILA RESORTS PLC
Company ID:- MARA
Date of Initial Announcement :- 05.01.2011
Proportion:- One (01) new ordinary shares for every four (04) shares held
Issue Price:- Rs.10/-
The number of shares to be issued :- 24,500,000 ordinary shares
EGM/ Provisional Allotment: 21.Feb.2011
XR: 22.Feb.2011
Dispatch of Provisional Letter of Allotment : 28.Feb.2011
Rights Trading Commences on : 07.Mar.2011
Renunciation: 14.Mar.2011
Last Date of Acceptance & Payment: 15.Mar.2011

1. if i needed to purchase stocks under the rights issue , i need to send the money for the rights before the 15th of March ( @ 10/=) and i would get the MARA stock ( say trading at about 12/= ) right ??

2. I noticed that some ppl sold their rights on the first rights trading day ? , how does that work ?. Could someone please explain that to me ?

Any advice would be appreciated

manike100 · 2 Re: lessons learnt from MARA RIGHTS issue Sun Apr 03, 2011 1:49 pm

manike100

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You should first understand what right is.. (http://en.wikipedia.org/wiki/Rights_issue)

Rights Trading Commences on : 07.Mar.2011
Last Date of Acceptance & Payment: 15.Mar.2011

You see there are two different dates. If you keep your rights without selling, you need to pay the amount and make them normal shares.

And if you don't like to pay, or if you do not have money to pay, you can sell it before 15.Mar

babytrader · 3 Re: lessons learnt from MARA RIGHTS issue Sun Apr 03, 2011 2:05 pm

babytrader

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hmm.. yeah i do undestand what a right is now .. what i am asking is what the process if i want to sell my rights ?..

BenZ · 4 Re: lessons learnt from MARA RIGHTS issue Sun Apr 03, 2011 2:16 pm

BenZ

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Rights will be lodged to your CDS account on or before "Rights Trading Commences on : 07.Mar.2011"

Then you can sell it on market till "Renunciation: 14.Mar.2011"

After that, your Rights on CDS will be vanished and you will get new shares for rights if you pay (@ 10 per share) for them before "Last Date of Acceptance & Payment: 15.Mar.2011"

mark · 5 Re: lessons learnt from MARA RIGHTS issue Sun Apr 03, 2011 4:34 pm

mark

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babytrader wrote:

hmm.. yeah i do undestand what a right is now .. what i am asking is what the process if i want to sell my rights ?..

you will get a letter of rights..........
if you want to sell your rights,you have to go to your broker and handover the form and tell to lodge it............
then you will get rights in your portfolio,you can trade them ......
but if you were unable to sell off the rights,you can subscribed to it by paying the value of rights by a draft or a cheque,before the acceptance day.............
hope this helped......... Cool

Nishan · 6 Re: lessons learnt from MARA RIGHTS issue Sun Apr 03, 2011 5:35 pm

Nishan

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Hello,

Thank you very much for your information. Some one please tell me what will happen to our reaming shares if we forget about right issue?

Regards.

milanka · 7 Re: lessons learnt from MARA RIGHTS issue Sun Apr 03, 2011 6:10 pm

milanka

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Nishan wrote:Hello,

Thank you very much for your information. Some one please tell me what will happen to our reaming shares if we forget about right issue?

Regards.

The remaining number shares would remain as it is but since you forget about the right issue and didnt subscribe there is a problem .

With the right issue after the issue the total number of issued shares would increase. correct ? . that means the NAVPS would drop.

So the actual value of the shares which own you would drop.
Hope this helps.

Nishan · 8 Re: lessons learnt from MARA RIGHTS issue Sun Apr 03, 2011 7:52 pm

Nishan

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milanka wrote:

Nishan wrote:Hello,

Thank you very much for your information. Some one please tell me what will happen to our reaming shares if we forget about right issue?

Regards.

The remaining number shares would remain as it is but since you forget about the right issue and didnt subscribe there is a problem .

With the right issue after the issue the total number of issued shares would increase. correct ? . that means the NAVPS would drop.

So the actual value of the shares which own you would drop.
Hope this helps.

Thanks...

babytrader · 9 Re: lessons learnt from MARA RIGHTS issue Sun Apr 03, 2011 11:10 pm

babytrader

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mark wrote:

babytrader wrote:

hmm.. yeah i do undestand what a right is now .. what i am asking is what the process if i want to sell my rights ?..

you will get a letter of rights..........
if you want to sell your rights,you have to go to your broker and handover the form and tell to lodge it............
then you will get rights in your portfolio,you can trade them ......
but if you were unable to sell off the rights,you can subscribed to it by paying the value of rights by a draft or a cheque,before the acceptance day.............
hope this helped.........

Thanks mark thats exactly what i wanted to know ? , so to confirm ... i dont need to pay anything for the rights to be lodged in the CDS right ?

mark · 10 Re: lessons learnt from MARA RIGHTS issue Mon Apr 04, 2011 12:11 pm

mark

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babytrader wrote:

mark wrote:

babytrader wrote:

hmm.. yeah i do undestand what a right is now .. what i am asking is what the process if i want to sell my rights ?..

you will get a letter of rights..........
if you want to sell your rights,you have to go to your broker and handover the form and tell to lodge it............
then you will get rights in your portfolio,you can trade them ......
but if you were unable to sell off the rights,you can subscribed to it by paying the value of rights by a draft or a cheque,before the acceptance day.............
hope this helped.........

Thanks mark thats exactly what i wanted to know ? , so to confirm ... i dont need to pay anything for the rights to be lodged in the CDS right ?