Friday, October 19, 2007



CIMB Warrants Team, Buck Up Pls

kam said...
Hi, Based on CNOOC RM0.44, Premium is 7.8%. Gearing 2.34.Tks

edwin said...
Dali, i think CIMB is really really wrong.. they made on fatal mistake in their calculations..When calculating the premium, they did not convert the warrant price into HKD (multiplied by ~2.25). Thats is why the premium for CCCC-C1 is ~25% on the digest while in actual fact it should be at about 3% at yesterday's closing prices.Sinopec-c1, should actually have a premium of 12% not a discount of 9%. Time to call CIMB and scold them!

Elizabeth wong :
Dear Dali
Sorry to be such a bother... Had another look at the cimb warrant digest, I think they made a boo boo with the prem info... of chlife c3 and c4 too...
Chlife C3 and C4 are at a prem of 19.5% and 9.1 % respectively. CIMB's fgures were a discount of 8% and 12%. Errors occur becuz warrant cost was not converted to HKD. CCCC-C1 discount is only 2.1%, contrary to what cimb is saying.. Incidentally, for cccc-c1, it is consistently traded at a small discount bcuz of shorter expiry, higher cost (ppl punt the lower cost warrnts it seems..) and as such, more often than not, it is a buyers' market. Holders cld give up on the market and go to osk and exercise, but if the discount is so small, why bother....
A quick scan of my list shows, 90% of the HK warrants are at gearing of around 2 times, so that is not much differentiation on that count.
Incidentally, u rated hscc-c1 as cheap... U are right in a way, basing on price prem, and the fantastic gearing. Underlying stock price although at a low of 13+ times, has not been performing, unlike BOC or ICBC I think. It is still not in the money yet. At yesterday's close of 40.5 sen, underlying stock price must increase to HKD163 to breakeven. While all those china H shares were climbing, HSBC has not caught on. What is the probability of warrnt holders of HSBC-C1 (at cost of 40.5 sen) get back their cost, to begin with???? HSBC-C1 will expire on 4 January 2008 and that is not a long way to go, is it? Could u pls share about the prospects of HSBC??
Your blog is highly respected and your views are being followed. Pls keep up the good effort as you have been a great resource to the investing community.
Thank you readers for highlighting CIMB's errors, about time I draw up my own excel file but very lazy la... CIMB, stop passing the buck of compiling IMPORTANT DATA to juniors, or are we to assume that the Unit Head/Manager also don't know how to calculate??!!
Obviously nobody checks them!!! Any CIMB dealers or remisiers even bother to tell the buggers off??? These data are inside a spreadsheet (I hope), surely somebody must spot the "wrong formula"???!!! How to trust CIMB?? I can close one eye if it was just ONE mistake, but its ALL OVER THE PLACE!!! Pretty embarresing, man. Yup, the top investment bank in the country ...
p/s posting on Expensive / Cheap covereds taken down as the figures relied upon (CIMB warrant digest) were largely incorrect ... my apologies for not double checking them myself...

In light of the revised figures, the best H-share warrants to hold would be Petrochina and CNOOC still.

5 comments:

kafka said...

Dali,
OSK is doing a better job in this. Check out the Warrants Pricing Table here:
http://www.osk188.com.my/pageSW.jsp?name=SW_PricingTable
Correct calculation... :)

kafka said...

Me again... just to add on a bit.
Since you recommended CNOOC & Petrochina. How about ZC-CIMB (Black Gold)? It is a basket warrent consists of CNOOC, Petrochina, Sinopec, Scomi & Sapcres. Coincidentally, I remembered you recommended at least 4 out of 5 of the stocks above. Furthermore, it is traded at ~4% premium, decent maturity, and above average gearing of ~4.

Though Basket Warrant calculation might be harder to maintain...hopefully CIMB investment manager knows how... :p

swifz said...

kafka

OSK calculation was wrong until recently. They also forgot the currency exchange.

solomon said...

The question lies on your hand. You as the investor should have done some homework. The websites should have put the disclaimer(perhaps there is now).

Salvatore only educate / bring up analysis for us. This is a great step towards mature investing.

deborah said...

I set up my own spreadsheet and corrected it along the way, with help from Dali... I put $$$ in my first punt after having my table in place.

We are investing our own $$$ so it makes alot of sense for us to do some homework... I think getting the table is by far the easiest job to do... the tough bit is decide which of the underlying instrument is likely to grow..

So, thanks Dali for pointing the way.. leading the blind so to speak..

On the basket warrant... erm... with the inclusion of local stks that are so susceptible to market manupulation... the odds I think are not as even as compared to the HK warrants... but then, I shall wait patiently for Dali's comments...