The Profitable Call Warrants

My Dearest Moo Moo Cow,

Let me share some interesting stuff with you.

12th July 2006: COMMERCE INTERNATIONAL MERCHANT BANKERS BERHAD ("CIMB") PROPOSED ISSUE OF UP TO 25,000,000 NON-COLLATERALISED CASH-SETTLED CALL WARRANTS OVER ORDINARY SHARES OF BERJAYA SPORTS TOTO BERHAD ("BJTOTO") ("BJTOTO CW")

25,000,000 call warrants were listed by CIMB.

Issue price was 30 sen.

Fast forward 2nd April 2007: MONTHLY DISCLOSURE PURSUANT TO PARAGRAPH 5.11A(2) OF THE LISTING REQUIREMENTS OF BURSA MALAYSIA SECURITIES BERHAD



WOW!!

Zero exercise of warrants!

Now assuming CIMB managed to sell all their warrants on listing day, this is pretty profitable, eh?

My dearest Moo Moo Cow, do not get me misunderstood. I am not saying that you cannot make money in such so-called instruments. (Actually, I call them 100% pure stock market gambling chips) Some traders have indeed profited from trading such instruments during the short life span of these warrants but if one buys this warrant in hope of profiting from the exercise price, then this example would show clearly how risky this venture is.

rgds