Previously, I had blogged on Genting's confusing share split issue.
- Genting's confusing Share Split.
- More confusion on Genting split issues
- Update on More confusion on Genting split issues
Those were the three postings made.
And I wrote the following comments.
- So correct me if I am wrong here.
Right now, in Genting's share split case, Bursa is NOW saying one could have sold their subdivided or split shares even before they are listed and quoted?
Isn't it so confusing?
And most people were taught that you could only sell shares only when the new shares are listed and quoted. That is you could only sell when you have these 'new' shares credited into your account.
Well apparently in Genting's case, this was not the case.
Now get this, Genting traded as high as 9.95 on the 11th. Yesterday, on the 13th it closed at 8.50. Wouldn't it be nice if everyone knew exactly that they could have sold their shares on the 11th itself when Genting was trading as high as 9.95 or even 9.50? It would be a good price to sell considering the massive run up in Genting's share price.
So I reckon it's simply not fair level playing field because the confusion caused by this simple issue of when one could have sold their subdivided shares.
Why can't the announcement be written in simpler English?
Say for example in Genting's case, post the exact date when one could have sold the shares because as it is, it's so confusing.
And my dearest Moo Moo Cow, it's rather ironic because I was highlighted by my dearest Scouser of one particular news article back in 2005. http://www.dailyexpress.com.my/news.cfm?NewsID=32801
In today's Star Bizweek, this issue was highlighted. Share split poser
- In Genting's case, the 738.93 million shares of 50 sen each were subdivided into 3.69 billion shares of 10 sen each. According to a Bursa Malaysia announcement on April 13, the split shares would be “listed and quoted” on April 16.
Says one investor: “When I read that announcement, did it mean that I can now (on April 13) sell my subdivided or split shares even before they are listed and quoted? From what I know, we are allowed to sell share only when the new shares are listed and quoted. That is, you can only sell when you have these 'new' shares credited into your account.”
Had investors known exactly when to sell their shares, that would have been sweet, as Genting traded as high as RM9.95 on April 11, but closed the day at RM9.50, which was still its all-time high.
“I wanted to sell my shares, but was afraid that I would be punished by Bursa for selling shares that had yet to be credited into my account,” says one contra trader.
A Bursa Malaysia official says the confusion was mainly due to this being the first time a share split was carried out under the new SPEEDS (Sub-Division of Shares, Shares Consolidation and Bonus Issue Exercise in the Central Depository Scheme) initiative.
Genting and Resorts were the first two issuers to implement exercises under SPEEDS. This is the stock exchange's latest initiative to enhance the efficiency of certain corporate exercises, namely share splits, share consolidation and bonus issues.
It works by enabling issuers to have a shorter time-to-market for the securities arising from these exercises. With SPEEDS, these securities can be traded on the next market day after the books closing date (BCD) instead of the current timeframe of 6 to 10 market days after BCD.
“Prior to this, stocks undergoing splits were suspended a total of 10 days. With SPEEDS, its seamless, and there is continuous trading,” says the official.
For instance, prior to SPEEDS, a stock undergoing a split would be suspended four days before book closure, and requoted six days after BCD. Under the SPEEDS timeline, there is no trading suspension. The newly split shares can be traded the day after BCD.
Thus, a trader who was trading Genting on a contra basis, would still be able to do it as if the stock had not undergone any split exercise.
If this contra player bought the stock on April 10 (a day before the ex date), but sold it on April 13 (T+ 3), his settlement would still be done on a 50 sen basis, as he bought the stock before it went ex.
Says the Bursa Malaysia official, “It's quite simple. Genting shares went ex on April 11, with BCD on April 13. Settlement of Genting shares on April 11, 12 and 13 will still be on a 50 sen basis, because the purchase of this stock would have been done on April 6, 9 and 10.
“However, if a buyer bought Genting shares on April 11 or later, settlement would have been on a 10 sen basis. If as of 5pm on April 13 (the BCD), an investor were holding Genting shares, then his name would appear in the register, thus entitling him for the corporate action. His shares would be split.”
How my dearest Moo Moo Cow?
Let me repeat again.
- Had investors known exactly when to sell their shares, that would have been sweet, as Genting traded as high as RM9.95 on April 11, but closed the day at RM9.50, which was still its all-time high.
To know that one could have sold when Genting traded as high as rm9.95 would have been extremely nice. Yes?
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