Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<p>We are coming down to the wire on the <a href="https://www.smartkarma.com/entities/singapore-airlines-ltd" target="_blank" data-smartkarma-citation="entities:74:1" rel="noopener">Singapore Airlines (SIA SP)</a> rights. </p><p>The shares went ex- on May 6, and promptly rallied hard as those who were short became almost doubly short overnight (many without knowing it). Then the shares settled down and as suggested would likely happen, when the rights started trading 13 May, the shares fell, taking the rights with it.</p><p>The Rights Shares entitlements started trading at intrinsic on 13 May (i.e. Rights Price = Share Price minus S$3.00) as those who had been short ex-day had to buy back the rights (and sell the shares they had bought back as a hedge), then the rights widened, trading at larger and larger discounts until today (19 May) the rights traded at a discount of S$0.14-0.15 or so much of the day (the chart below shows the Rights Price on the left (blue line) and the share price on the right (candlesticks).</p><div class="content-highlight"><p><em>The spread is the number of cents (19 May close S$0.14) of spread between the two. If you buy the rights at S$0.56, you can add S$3.00 for a net price of S$3.56 to buy shares next week which currently trade for S$3.70.</em></p></div><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/134/486/original/Screenshot%202020-05-19%20at%2011.20.24%20PM.png?1589901655" class="editor-image img-responsive" data-smartkarma-image-id="134486"></figure><div class="content-caption">source: tradingview.com, Quiddity</div><p>The Rights MCBs opened on 13 May at S$0.001, rallied on short-covering to S$0.019 (1.9cts) and then fell all the way back to S$0.001 (the minimum possible trading price) where they stand today.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/134/483/original/Screenshot%202020-05-19%20at%2011.12.46%20PM.png?1589901232" class="editor-image img-responsive" data-smartkarma-image-id="134483"></figure><p>There is no great demand for these MCBs. I would warn investors that it is possible that the SGX decides that they are not worth keeping listed. They could trade off-exchange (like most bonds would) which would make them more "normal" as a bond, and less subject to "exchange noise" (which may actually make them <em>more</em> attractive than less for some investors).</p><div class="content-highlight">
<h2>Why Do I Care?</h2>
<p>The 20th of May is the second-to-last trading day of the Rights Shares. </p>
<p>If you own Singapore Air shares - as a long-only fund, long/short fund, or index fund - there is something to do here. </p>
<p>If you are skeptical of Cathay Pacific here, there may be something to do. </p>
</div>

We are coming down to the wire on the Singapore Airlines (SIA SP) rights. The shares went ex- on May 6, and promptly rallied hard as those who were short became almost doubly short overnight (many without knowing it). Then the shares settled down and as suggested would likely happen, when the rights started trading 13 May, the shares fell, taking the rights with it.The Rights Shares entitlements started trading at intrinsic on 13 May (i.e. Rights Price = Share Price minus S$3.00) as those who had been short ex-day had to buy back the rights (and sell the shares they had bought back as a hedge), then the rights widened, trading at larger and larger discounts until today (19 May) the rights traded at a discount of S$0.14-0.15 or so much of the day (the chart below shows the Rights Price on the left (blue line) and the share price on the right (candlesticks).The spread is the number of cents (19 May close S$0.14) of spread between the two. If you buy the rights at S$0.56, you can add S$3.00 for a net price of S$3.56 to buy shares next week which currently trade for S$3.70.source: tradingview.com, QuiddityThe Rights MCBs opened on 13 May at S$0.001, rallied on short-covering to S$0.019 (1.9cts) and then fell all the way back to S$0.001 (the minimum possible trading price) where they stand today.There is no great demand for these MCBs. I would warn investors that it is possible that the SGX decides that they are not worth keeping listed. They could trade off-exchange (like most bonds would) which would make them more "normal" as a bond, and less subject to "exchange noise" (which may actually make them more attractive than less for some investors).
Why Do I Care?
The 20th of May is the second-to-last trading day of the Rights Shares. 
If you own Singapore Air shares - as a long-only fund, long/short fund, or index fund - there is something to do here. 
If you are skeptical of Cathay Pacific here, there may be something to do. 


Singapore Air - If You Are Long, Use the Rights

Asian Insight Provider - Actionable ideas, CrossASEAN Research

Henry Soediarko

Asian Insight Provider - Actionable ideas

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Equity Bottom-Up

<p>On the second release of Worthy News Stock Moving note, we will discuss how <a href="https://www.smartkarma.com/entities/unilever-indonesia-tbk-pt" target="_blank" data-smartkarma-citation="entities:231:1" rel="noopener">Unilever Indonesia (UNVR IJ)</a> plans to do a stock split that may cause short term weakness in the share price but creates an opportunity for retail investors to participate in owning Unilever. <a href="https://www.smartkarma.com/entities/bank-permata-tbk-pt" target="_blank" data-smartkarma-citation="entities:728:1" rel="noopener">Bank Permata (BNLI IJ)</a> is charging ahead with its digital banking initiative, the first in Indonesia.</p><p><a href="https://www.smartkarma.com/entities/sri-rejeki-isman-tbk-pt" target="_blank" data-smartkarma-citation="entities:20178:1" rel="noopener">Sri Rejeki Isman (SRIL IJ)</a> had a fire in one of its production sites. Although the management claimed that everything is insured and production will not be affected, there will still be some delay in the production. JUUL - the electronic cigarette distributed by <a href="https://www.smartkarma.com/entities/erajaya-swasembada-tbk-pt" target="_blank" data-smartkarma-citation="entities:18869:1" rel="noopener">Erajaya Swasembada (ERAA IJ)</a> - is not only available in the first tier city high-end mall, but also in the hypermart in the toll road pit stop in a city like Madiun and Jombang (tier three cities in Indonesia). Speaking about wide distribution! </p>

On the second release of Worthy News Stock Moving note, we will discuss how Unilever Indonesia (UNVR IJ) plans to do a stock split that may cause short term weakness in the share price but creates an opportunity for retail investors to participate in owning Unilever. Bank Permata (BNLI IJ) is charging ahead with its digital banking initiative, the first in Indonesia.Sri Rejeki Isman (SRIL IJ) had a fire in one of its production sites. Although the management claimed that everything is insured and production will not be affected, there will still be some delay in the production. JUUL - the electronic cigarette distributed by Erajaya Swasembada (ERAA IJ) - is not only available in the first tier city high-end mall, but also in the hypermart in the toll road pit stop in a city like Madiun and Jombang (tier three cities in Indonesia). Speaking about wide distribution! 

Worthy News Stock Moving - Indonesia - 30 Sep 2019

Malaysia

Capital A Berhad provides airline operating services. The Company operates scheduled domestic and international flights, as well as provides air transportation and air cargo services. Capital A also engages in tour operating business and leasing aircrafts to customers worldwide.

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Capital A (CAPITALA MK)

Singapore Air - If You Are Long, Use the Rights

We are coming down to the wire on the Singapore Airlines (SIA SP) rights. The shares went ex- on May 6, and promptly rallied hard as those who were...

Travis Lundy

Worthy News Stock Moving - Indonesia - 30 Sep 2019

On the second release of Worthy News Stock Moving note, we will discuss how Unilever Indonesia (UNVR IJ) plans to do a stock split that may cause...

Henry Soediarko

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