Bursa Malaysia Stock Information

A corporate action goes beyond the “what”. It is also about the “when”. When a corporate action happens, you will encounter terms such as ex-date, record date, entitlement date, cum date and book closing date.

While these terms actually have very simple meanings, they can have an impact on your stocks that are undergoing corporate actions, or the stocks that you intend to buy. Once locked into your financial dictionary, you will have a deeper understanding and greater appreciation of corporate actions.

Announcement date: When a company plans a corporate action, it will first make an announcement to its shareholders. The announcement will highlight what the corporate action is all about, and when it will take place.

As a well-informed investor, you should take note of the announcement. Check the company website for further details or visit the Bursa Malaysia website which will also give general details on the corporate action to be undertaken.

Cum date: Cum date is the last date the particular stock is traded at market price before the corporate action takes effect. What this means is, you will be able to buy and sell the particular stock based on the market price until the cum date.

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INVESTING in the stock market is more than buying stocks when the price is low and selling when the price is high. The number of shares you hold can increase or decrease when companies that issue these shares undertake a corporate action.

Bursa Pursuit players would have experienced terms such as “share splits” or “bonus issues” during the game when a few public-listed companies (PLCs) undertook corporate action to build up their capital base. Corporate actions are also known as corporate exercises.

A corporate action is a process undertaken by a PLC to enrich its capital structure and subsequently the value of the company’s stock. Corporate actions are usually agreed upon by a company’s directors and approved by the shareholders at an AGM or EGM.

There are different types of corporate actions, and each can have an impact on the price of a share. Therefore, it is critical to know what each corporate action means to help you in your trading decisions.

Three points you need to know are:

1. Is the corporate action a subscription, whereby you can choose to accept what is offered, or a free entitlement, where the corporate action is automatically effected through the shares you are holding.
2. What is the ratio proposed under the corporate action, which determines how many new shares you will receive for the existing shares held.
3. The impact of the corporate action on the price and number of shares, which will ultimately impact on your portfolio value.

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Listed on 7th December 2007

• CNOOC-C2: CW CNOOC Ltd (CIMB)
• HKEX-C6: CW Hong Kong Eexchanges and Clearing Ltd (CIMB)
• CHLIFE-C5: CW China Life Insurance Company Ltd (CIMB)
• TENAGA-CH: CW Tenaga Nasional Bhd (CIMB)
• RESORTS-CE: CW Resorts World Bhd (CIMB)

A call warrant is a derivative-based product that has a fixed tenure (maturity) and, if not exercised, is worthless after its expiry date. Therefore, it is essential to select a call warrant that has sufficient time before it expires to match investment targets.

While a call warrant is traded like a stock, it is not based on the company’s performance but the attractiveness of the company’s stock that is being traded on the stock market. It derives its value from the value of an underlying security stock.

A holder of a call warrant does not have any voting, shareholding or dividend rights. The investor therefore has no say in the management of the company, even though he is affected by any decisions made by the company that impacts the share price of the warrants.

As call warrants are somewhat volatile investment vehicle, it pays to understand some of the terms used.

• “Mother share”: The share on which the call warrant is based. It is also known as the underlying security.
• Expiry date or ex-date: This is a very important date to know, because if you do not redeem your call warrant before or on the expiry date, it ceases to exist.
• Exercise or strike price: It’s the stated price per share for which the mother share may be purchased or sold by the call warrant holder upon exercise of the call warrant contract.
• Settlement types: This means the type of settlement to warrant holders upon maturity i.e. physical-settled or cash-settled.
• Settlement price: This means a reference price determined by the market in which a Call Warrant is converted into cash value.

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3rd December 2007

GENTING-CI: CW Genting Bhd (CIMB)

IOICORP-CF: CW IOI Corporation Bhd (CIMB)

BJTOTO-CC: CW Berjaya Sports Toto Bhd (CIMB)

BOCOM-C1: CW Bank of Comm Company Ltd (CIMB)

SINOPEC-C3 : CW China Petroleum & Chemical Corp Ltd (CIMB)