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SIA MCB R only at 0.1 Cent. Think sell my Reit and buy SIA R, almost guaranteed return after 10 Yrs.

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Old 15-05-2020, 07:43 PM   #1
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SIA MCB R only at 0.1 Cent. Think sell my Reit and buy SIA R, almost guaranteed return after 10 Yrs.

As pre title, how come it become worthless? Buy it now and get $1 SIA right, hold on for 10 Years, if SIA never redeem, the return should be more than 5% per year.
any risk involved? cannot think after 10 Years SIA mother share still below $4.
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Old 15-05-2020, 08:00 PM   #2
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You are not getting sia at $1 but paying $1 for the right to convert to shares at end of 10 years provided it is not redeemed earlier.
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Old 15-05-2020, 08:22 PM   #3
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1.001 sounds too good to be true

Last edited by Xylitol; 15-05-2020 at 08:25 PM..
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Old 15-05-2020, 08:40 PM   #4
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MCB is a bond with (lousy) terms which I don't like. You give me the MCB R free also I don't want to subscribe. There are other better alternatives.
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Old 15-05-2020, 09:07 PM   #5
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pardon a newbie question : the price now is at 3.90, why people still want to sell huh ? are these people short selling ?

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Old 15-05-2020, 09:07 PM   #6
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MCB is a bond with (lousy) terms which I don't like. You give me the MCB R free also I don't want to subscribe. There are other better alternatives.
Are those alternatives risk free? remember Hyflux.
At least under SIA name, feel secure.
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Old 15-05-2020, 09:09 PM   #7
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What do you mean why people still want to sell?

Sell what?

Stocks are meant to be bought and sold.

pardon a newbie question : the price now is at 3.90, why people still want to sell huh ? are these people short selling ?
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Old 15-05-2020, 09:10 PM   #8
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You are not getting sia at $1 but paying $1 for the right to convert to shares at end of 10 years provided it is not redeemed earlier.
Not correct.

If he buys SIA MCB R at $0.001, he will need to accept and pay $1 for 1 MCB.

The MCB will be converted to SIA share at the end of 10 years, if SIA does redeem the MCB by then.

The value of MCB will grow at rate of 4% compounded semi-annually, 5% for next 3 years and 6% for remaining 3 years and this value will be applied for purpose of redemption at any half yearly mark. The final value of $1.806.11 will converted to SIA share divided by 4.84, if there is no change to initial conversion price.

In simple term, 1,000 mcb at $1,000 will grow to $1,806.11 and will be converted to 373 SIA shares, if no redemption takes place.

In short, you pay $1,000 now and get 373 shares at $2.681 (1,000/373) per share at end of 10 years, if no redemption takes place. If market price of SIA is less by then, just suck thump.
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Old 15-05-2020, 09:19 PM   #9
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Not correct.

If he buys SIA MCB R at $0.001, he will need to accept and pay $1 for 1 MCB.

The MCB will be converted to SIA share at the end of 10 years, if SIA does redeem the MCB by then.

The value of MCB will grow at rate of 4% compounded semi-annually, 5% for next 3 years and 6% for remaining 3 years and this value will be applied for purpose of redemption at any half yearly mark. The final value of $1.806.11 will converted to SIA share divided by 4.84, if there is no change to initial conversion price.

In simple term, 1,000 mcb at $1,000 will grow to $1,806.11 and will be converted to 373 SIA shares, if no redemption takes place.

In short, you pay $1,000 now and get 373 shares at $2.681 (1,000/373) per share at end of 10 years, if no redemption takes place. If market price of SIA is less by then, just suck thump.
So if I intended to buy SIA shares for the long term investment, I should not buy now at $3.7 per share rather buy this MCB R, and the buy price is $2.681 per share. am I right?
If SIA share below $2.681 after 10 years, I will loss money but better than buy SIA now. If SIA decided to redeem bond before 10 Year, I will still got at least 4% return.
what about SIA share going to further dilution within 10 years?

Last edited by comex_1; 15-05-2020 at 09:32 PM..
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Old 15-05-2020, 09:33 PM   #10
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So if I intended to buy SIA shares for the long term investment, I should not buy now at $3.7 per share rather buy this MCB R, and the buy price is $2.681 per share. am I right?
If SIA share below $2.681 after 10 years, I will loss money but better than buy SIA now. If SIA decided to redeem bond before 10 Year, I will still got at least 4% return.
what about SIA share going to further dilution within 10 years?
If people here can predict what’s going to happen in the next 10 years. They wouldn’t be replying to your question anymore.
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Old 15-05-2020, 09:39 PM   #11
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The present number of shares is 1,185,128,324.

With the rights share, the number of shares will increased by 1,777,692,486.

With the conversion of mcb, the number of shares will increased by 1,304,626,600.

With the conversion of addition mcb (if issued subsequently), the number of shares will increase by 2,29,680,786.

Whether the present price of SIA has factored the above dilution, it's difficult to say. But certainly, it has factored the dilution resulting from the immediate rights share.
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Old 15-05-2020, 11:10 PM   #12
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tried to queue since 11am this morning for 5000 but did not get filled when mkt closed
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Old 15-05-2020, 11:51 PM   #13
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Are those alternatives risk free? remember Hyflux.
At least under SIA name, feel secure.
SingaporeAir depends on international flights. There's no domestic flights. If most/all countries implement 14days isolation for visitors, who will be taking international flights?

I think LKY said before... SIA can fall, just Changi Airport cannot fall.

Last edited by Archnemo; 15-05-2020 at 11:53 PM..
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Old 15-05-2020, 11:53 PM   #14
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If SIA doesn't collapse, your returns is 4-6% pa depending on the maturity.

I suggest you wait for the rights exercise to be over.

Right now, there are a lot of uncertainty because retail investors are panicking.
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Old 16-05-2020, 04:41 AM   #15
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pardon a newbie question : the price now is at 3.90, why people still want to sell huh ? are these people short selling ?

sell for cash to sub rights

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