The Singapore Airlines (SIA) (SGX:C6L) rights issue is a complicated one and I bet most shareholders don’t know what is going on.
I always believe that financial products are not shampoos and education is the only way to bridge the knowledge gap.
I took the liberty to record a walkthrough of the rights issue document and highlight the salient points for SIA shareholders to take note of.
If you are not a video person, you can read the following main points accompanied with some explanations.
SIA is offering 2 different rights issues to raise money.
- Rights shares
- Rights Mandatory Convertible Bonds (MCBs)
Rights Shares
Rights Shares Issue: SIA is issuing more shares to raise money. Only shareholders will receive the rights to buy more shares. The cutoff date for the shareholder list is on 5 May 2020, 5pm. Thereafter, you won’t be able to receive the rights shares even if you buy SIA shares. For every 2 shares you have, you will get 3 rights shares. You don’t need to pay for the rights. They would be automatically deposited into your CDP or custodian accounts.
Renounceable rights: The rights shares are tradable on SGX. You can buy and sell them like a normal stock. If you don’t want to exercise the rights, you should sell them off. If you want to buy more shares you can also buy more rights and exercise them later. The rights shares will start trading from 13 May 2020, 9am till 21 May 2020, 5pm. The name of the rights shares will be “SIA R” with the symbol “LRDR”.
Issue Price at $3: This means that you need to pay $3 per rights share in order to convert the rights into shares. The exercise deadline is on 28 May 2020, 5pm. If you hold the shares in a custodian account, your broker may set a deadline earlier than 28 May. So take note of the timing. You have to pay for the rights via ATM if you hold the rights in CDP and transfer the money to your brokerage account if the rights are held under custody.
Theoretical Ex-rights Price (TERP) of S$4.40: SIA share price was around $6+ before the rights shares issue. As the new shares are issued at S$3, you can expect SIA share price to trade lower to around S$4.40 after the rights are issued. But the market may not trade according to this theoretical price.
Rights MCBs
Rights MCBs Issue: Besides the rights shares issue, SIA is also issuing rights MCBs to raise more cash. I suspect the reason for issuing MCBs is because there would be too much dilution if it is a pure rights shares issue and SIA share price will have to trade much lower. Thus to be clear, these are bonds and not shares.
Only shareholders will receive the rights to buy these bonds. The cutoff date for the shareholder list is on 5 May 2020, 5pm. Thereafter, you won’t be able to receive the rights MCBs even if you buy SIA shares. You will receive 295 rights MCBs for every 100 SIA shares you own. You don’t need to pay for the rights. They would be automatically deposited into your CDP or custodian accounts.
Renounceable rights: The rights MCBs are tradable on SGX. You can buy and sell like them like a normal stock. If you don’t want to exercise the rights, you should sell them off. If you want to buy more bonds you can also buy more rights and exercise them later. The rights MCBs will start trading from 13 May 2020, 9am till 21 May 2020, 5pm. The name of the rights MCBs will be “SIA MCB R” with the symbol “GANR”.
Issue Price at $1: This means that you need to pay $1 per rights MCB in order to convert the rights into bonds. The exercise deadline is on 28 May 2020, 5pm. If you hold the shares in a custodian account, your broker may set a deadline earlier than 28 May. So take note of the timing. You have to pay for the rights via ATM if you hold the rights in CDP and transfer the money to your brokerage account if the rights are held under custody.
Zero-coupon: The MCBs are zero-coupon bonds which means you will not receive interest payments. Instead, you will receive a maturity amount that is higher than the principal you have put in. The maturity amount is equivalent to S$1,806.11 based on $1,000 principal. Or every $1 you put in, you get $1.81 at the end of 10 years.
Mandatory Conversion: As the name emphasised mandatory conversion, this means that the bonds will be converted to SIA shares upon maturity. There will be no cash paid to you.
Callable: The MCBs are also redeemable by SIA before maturity. They can have the option to redeem once every 6 months. Your yield will range between 4% and 6% depending on the year of redemption. The closer to the maturity, the higher the yield.
SIA Rights Issues FAQ
Q: How soon will I see the rights in my CDP / custodian account?
Not sure. But definitely before 13 May 2020 because the rights will start trading.
Q: What prices should the rights shares and rights MCBs trade at?
Price of the Rights Shares should trade close to SIA share price – $3.
Price of the Rights MCBs should trade close to $0.
Q: I will have odd lots of Rights Shares and Rights MCBs, how do I sell them?
There are two more counters, SIA R1 (symbol:HTFR) and SIA MCB R1 (symbol:8YJR), where you can sell your odd lots. Ask your broker if you can amalgamate the orders for the R and R1 so that you only pay commission once.
Q: If my SIA shares are held under CPFIS, must I buy the Rights & MCBs using my CPF fund? If I decided to sell the Rights, will the proceeds go back to CPF or cash?
Yes, you can use CPF to fund the rights purchase, provided your CPF limit allows.
If you sell the rights, the monies will go back to your CPF.
Q: I have SIA shares which I have bought using cash, would I be able to exercise them with CPFIS instead of cash?
No. You have to use cash.
Q: I have SIA shares in my SRS account, what do I need to do?
Your agent bank which holds your shares in custody should inform you about your rights shares and MCBs. You have to follow their instructions to exercise them. Otherwise, you should sell the rights.
Q: How are our shares diluted if we don’t subscribe to the rights shares?
Your % ownership of SIA will reduce. Assuming you have 1m shares. And you didn’t buy more but the number of shares will increase anyway. So your % stake can drop from 0.08% to 0.03%.
Q: If i do not own any SIA share can i buy the rights shares?And how do these rights shares work after I buy them?
Yes, you can buy the rights shares even if you do not have SIA shares. After you buy the rights shares, you still have to pay to convert the rights to shares. Don’t buy if you have no intention to exercise the rights, because the rights will expire.
Q: Do we need to pay $4.84 for a MCB in order to convert it to a SIA share in 10 years’ time?
No need to pay. They will just give you the shares in exchange for the bonds.
Conclusion
We hope that we have simplified these rights issues to you. You have to understand this and decide what to do if you are a shareholder. Either sell the rights or exercise them. Don’t let the rights expire worthless!
Hi Alvin,
What would happen if SIA shares fall below 3$, is it even a possibility? How would that impact those who are eligible to exercise their rights at 3$?
Thanks in advance!
Anything is possible. If that happens, fewer shareholders would exercise the rights at $3 because it wont make sense. The rights shares will be worth $0 too
Hi Alvin
Thank you for your information.
Just wish to clarify – I have 1500 SIA rights in my CDP account. Since I am not keen to exercise the rights and they are in my CDP account, am I right to say I can sell them now and gain whatever amount from selling them?
For the MCB rights, if I do not do anything, will these MCB rights in my account expire? Does not make sense to sell since it is trading at $0.001 and we need to pay commission to sell these rights.
yes, sell if you have no intention to exercise the rights.
unlikely you can sell the MCB rights. There’s no demand. And you are right the commission paid may not make sense too.
Dear Alvin,
Appreciate your concise write up on the SIA Rights Share and MCB issue.
I own 2,000 SIA shares in CPFIS account. I plan to exercise my Rights issue but need to pay with Cash as exceeded my CPF investment limit. Wld the 3,000 Rights shares be under CPFIS or CDP?
Tks in advance for your reply.
rights will follow where your SIA shares are, which are in your CPFIS account
Hi Alvin,
1. I would like to take advantage of this low price and buy some SIA shares, am I at a disadvantage to enter the market at this stage?
2. SIA R has been on a steep decline. If I were to purchase it now (intention is to keep long term and not trade so soon) can I choose to sell it after the exercise is over? (after 21/5)
1) This is difficult to answer. If you are not sure, better dont buy. You should have an investment process to guide you what to do.
2) SIA R will stop trading on 21 May 2020. You have to exercise by 28 May. Otherwise your money will go into the drain
Hi, i have bought some SIA BCM R shares. Can i know what will happen if i never sell before 21 May?
They will be worthless after 21 May if you dont exercise them
I bought 2000 shares at $4.77, and not eligible to buy rights shares. So do I need to stop the loss before 21 May or still keep the shares until waiting bulling up ? I don’t know how dip will be.
The share price has already adjusted for the rights so there should be no further adjustment. The share price is just moving based on market sentiment.
More importantly, I think you need to lay out a proper investment process to guide you on making such decisions. Otherwise the problem will keep coming back.
Hi Alvin,
I know can buy rights even without shares yet. Is it the same if I use cpf/srs funds?
Thank you in advance.
yes. but make sure you exercise them
Hi Alvin,
I paid for the shares using SRS through DBS. They mentioned that I can only pay for the rights using SRS and not cash.
If I do not have enough money in the SRS account, then it means I won’t be able to exercise the rights and the only way is to sell the rights.
That’s probably the worst possible outcome.
Not sure if you can top up in time to pay for the rights. If not, sell them.
Thanks for your reply Alvin. The problem is I have reached the top up limit for SRS for the year.
I will probably buy the shares at current price of 3.9 or 4 rather than selling the rights at 0.8 now.
Makes sense?
You can sell the rights in your SRS and use cash to buy the shares.
Thanks Alvin not ideal but not that bad considering the circumstances.
Hi Alvin
Can the MCB R convect to SIA mother shares within the 10 yrs .
Thanks.
it MUST be converted to SIA shares in 10 years’ time
Thanks Alvin. In your write up u mentioned
“Zero-coupon: The MCBs are zero-coupon bonds which means you will not receive interest payments. Instead, you will receive a maturity amount that is higher than the principal you have put in. The maturity amount is equivalent to S$1,806.11 based on $1,000 principal. Or every $1 you put in, you get $1.81 at the end of 10 years”.
But also mentioned that the MCBs will be converted to shares upon maturity. So how does this conversion tie in with the maturity amount of 1.81 one wld receive?
If I read correctly one will pay $1 to covert the MCB rights to bonds. Upon maturity the bond will auto covert to shares with no further outlay. So the share price at time of maturity could be anything. Unless the number of shares each bond will convert to will be such that the “gain” will be around 0.81 per $1 ?
Tks
Yes. Just to be clear about your last line: the MCBs will be worth 1.81 after 10 years. 1000 MCBs = $1810. You get SIA shares based on 1810 / conversion price.
Hi Aliv,
I have been allotted 7375 MCB & 3750 Rights, Since both are not in multiples of 100’s I am unable to sell them completely via DBS Vickers.
Just wanted to check, is there a way to do it ?
Or
What happens to unsold 75 MCB & 50 Rights ?
Thanks !
you can sell them via the odd lots counters. SIA MCB R1 and SIA R1
Hi Alvin,
I own SIA shares and received the rights on my Vickers.
1. Will LRDR become C6L shares if I exercise my rights?
2. Please confirm the current and historical SIA prices already reflect the dilution when I look at the charts
3. If I have 1000 SIA shares subscribed at $6.5 per share and exercise my right for 1,500 shares at $3, my average share price will be 4.4 so it will start becoming a profitable investment only after the SIA share price has exceeded 4.4. The current market price is 3.7, so I need to wait for a 19% appreciation, is that correct?
4. I I decide to sell my rights at the current rights price (say $1), I will get $1,500. So I can take a shortcut and say my average SIA price will be $6,500 – 1500 = 5,000, ie $5 per share. My investment will start being profitable only after the SIA share price has exceeded 5. I need to wait for 35% appreciation from the current price. Is that correct?
2. Is the trading price of rights going to fluctuate until the expiration of the exercise period? It’s currently at 0.95 for shares and 0.005 for bonds on my Vickers
3. Assuming I exercise for rights for the bonds, in 10 years the value of my investment will be 1.81 more (in the form of shares @ 4.84 per share). If the share price then is more than 4.84, it does mean I have even more profit? Beside the yield, is there also a potential share gain?
1) yes
2) Depends on whether the chart provider has adjusted the price.
3) yes.
4) yes
5) yes
6) the value you get will always be 1.81 x the number of MCBs. The conversion price may change and not remain at 4.84.
Hi, just want to find out, how secured are the bonds? Is it generally safer to get SIA bonds? Many Thanks!
they are both unsecured bonds so i think they are similar. just note that the SIA bonds pays interest while MCB is a zero-coupon bond.
Hi Alvin,
Your site has helped greatly in the understanding. Thank you.
I own 1000 shares of C6L but transaction was after 08-May so I am not entitled to the Rights issue.
I have applied for the 1500 Rights Shares on SQ website and make payment ($4500 via PayNow) yesterday but only purchased the 1500 LRDR (via Vickers) today.
I believe I got the sequence reversed…
Would this be a problem?
wow! i am not sure if it still works. you have to check with them or maybe they will reject your $4500.
Hi Dr Wealth,
Thank you so much for presenting a clear picture of this confusing situation. It was mentioned a yield of 4-6% for the mcb. How is that calculated? when mcb gets converted to shares in 10 years, what happens to the fractionals (mine works out .37). thanks
The yields are set by SIA.
Fractions of a Rights MCB Conversion Share will not be issued on conversion and no cash adjustments will be made in respect of such fractions of Rights MCB Conversion Shares.
Thanks for the interesting video.
I bought some SIA shares at $15 donkey years ago using CPF. My CPF is over the limit for stock, does it mean there’s no way to exercise Rights / MCB at all ? Even using cash or top up CPF ?
BTW, why I cannot see my Rights or MCB in my CPF or bank investment account ?
not sure if the cash top up will be in time.
sometimes you dont see it in the platform because there’s lag in updating. you have to check with your agent bank.
Hi Alvin,
Thank’s so much for the explanation and all the replies.
Well, i have only 100 sia shares, got 150 rights
Can i apply for excess rights ?
if yes, what would be the price of the excess rights ? is it price of right on the last day ?
Thank’s so much
You can buy more rights from the open market and exercise them
Hi Alvin,
If I buy the rights from poems website, how do I go about exercising it? Thanks.
depends you are using CDP or POEMS as a custodian.
The former you can apply online or ATM. The latter you have to transfer money to POEMS.
Hi Alvin,
I’ve sold my rights, outstanding MCB rights. Assuming I have 2000 MCB rights and I sell at 0.002 = $4, I will still need to pay brokerage fee minimum $25, isn’t that not worth.
If I leave it there to expire, no loss to me right?
Yup
Hey Alvin,
If we spend $1 to buy the MCB, and then SIA converts it to $4.84 share price, does that mean an instant 484% profit on paper? How does the math work as Im confused.
you spend $1. After 10 years, it is worth $1.81.
If you have 1000 MCBs, they will be worth $1810.
You get 1810/4.84 = 373 shares in 10 years’ time
Hi Alvin, so if SIA share price is $10 10 years later, with 373 shares it will worth $3,730 for that $1,000 invested now? Thanks
Yes, the word is ‘if’. And also the conversion price may change. Just that the initial conversion price is set at 4.84
Hi Alvin,
Some questions. Am very new to this as I am just an OCBC Blue Chip holder trading at a fixed small sum monthly. I’ve received a letter notifying me to participate in either the Shares Rights Issue, MCBs Rights Issues, Both, or none.
2 questions:
1) Say if I owe 100 shares currently and thus am entitled 150 rights shares. If I participate in the shares rights, I would have to pay $3 per share, so $450 in total. For this $450 for 150 rights shares, they will be added into my current no. of shares? So I will have 100 + 150 = 250 shares?
Or I am paying $450 to hold an extra of 50 shares to a total of 150 shares?
2) If I participate in MCBs rights, 100 existing shares will be equivalent to $295 Rights MCBs. This will be transferred out to my CDP account. When the bond hits 10 years for eg, how would I be able to receive the equivalent shares after conversion? It will be transferred back to my Blue Chip account?
1) 250 shares.
2) you get shares 10 years later or cash if SIA redeems earlier. Not sure if it will go to your blue chip account. confirm w OCBC
Hi Alvin,
Based on the MCB conversion rate of $4.84, I should be getting 373 shares for every $1000 invested in MCB, after 10 years. But I notice that the conversion rate is not fixed (subjected to change by SIA). So does this imply that they can decide to amend the conversion rate to say $8 on the 9th year, and I would end up with only 225 shares instead? That would be as if I had paid $4.40 today for each share and got zero return after 10 years !
At the end of the day you should just know that the MCBs are worth $1.81. whatever the price for conversion doesnt matter.
If conversion is 4.84, you get 373 shares. the total value is still $1810.
if conversion is 8, you get 226 shares. the total value is still $1810.
Hi Alvin,
To follow up on this question, if after 10 years, with a conversion of 4.84, I will get 373 shares, but if SIA share price at that point is $3, the value of 373 shares is only $1119. Would I have then made a gain of only $119 instead of $810?
they may change the conversion price lower. assume $3, you get 1810/3 = 603 shares
Alvin,
Not quite the same, because I won’t be getting back $1810. I would only be getting back 226 SIA shares, vs 373 shares.
But my main question is :
AM I correct to say that SIA reserves the right to change the conversion rate, even up till the last year before the MCB matures ? Thanks.
The value of the shares is the same.
yes
Hi Alvin
Good day to you!
I have 1000 SIA Share bought during march this year hence i will have 1500 of right shares.
If i exercise my rights(Meaning paying @ $3 dollar per share) and i just leave it there without selling.
1) Will these 1500 shares automatically converted to SIA mother share(sia ordinary share) after the trading for right expired on 21may 2020?
2) If the first question is a ‘Yes’, these 1500 converted share can only be sold using the CDP account?
Thank you very much!!
1) you must pay to convert. And if you do, they will convert to shares in early jun and you should see it in your account.
2) yes if the shares are held in CDP.
Hi Alvin, how much to pay to convert, in relate to your first question reply if i exercise my rights of 1500 and my existing shares of 1000 = 2500 shares.
1500 x $3 = $4500
Dear Alvin,
I have invested my SRS thru OCBC and got 2 updates..
one with $3 and one with $1.
I am planning to buy excess rights shares..
1. 1000 Shares @ $3.. What will happen?
2. 1000 Shares @ $1.. What will happen?
I have gone thru this whole conversation, but i am still confused on this.
You have mentioned that need to exercise otherwise money will go waste.. Means if i give instructions to OCBC on 1000 shares each.. Is it correct?
Please guide me..
Thanks in Advance..
1) pay $3000. your rights will convert to SIA shares
2) pay $1000. you get the MCBs and matures in 10 years.
‘Don’t let the rights expire worthless!’
when do the ‘Rights shares’ expire?
i intend to keep ‘MCBs’ since interest is ok…
The rights expire on 28 May.
If you want to keep the MCBs, then you have to pay $1 for every Rights MCB to convert them to MCB.
very kind of you to response to everyone of us here
I have 9000 shares means I m entitled to 13500 rights.
Which also means that have to pay $40,500 to own them.
But if I choose to sell them , how do I go about doing this ? And when ? Because I do not have that much of cash anymore
Thanks for your response in advance
sell them using your brokerage platform like how you sell stocks. by 21 may 2020
“Your % ownership of SIA will reduce. Assuming you have 1m shares. And you didn’t buy more but the number of shares will increase anyway. So your % stake can drop from 0.08% to 0.03%.“
“ if one doesn’t sell the rights or exercise them, they will be diluted when the rights shares are converted to shares.”
the increase of share will only happen 10 years later when the bond is converted to share or now? if I don’t intend to keep the existing mother share I am holding now for more than 10 years, would my current share be diluted?
the number of shares will increase by 1.5x after 28 May 2020. If you dont sell or subscribe, you will be diluted by the end of May.
Can I sell my shares any time if
(1) I intend to sell/sold my Rights before 21 May?
(2) I want to exercise my Rights?
You can sell your SIA shares without affecting your rights.
MCB at $1
Eg if I have 6000 share for MCB, I will have to pay $6000 and upon expiry(10 years) I will have (6000+4860)= $10,860MCB and it will be converted to sia share base on $4.86 price?
in a way yes.
Hi Alvin,
I’m a existing SIA share holder deal via DBS Vicker and was given free right and MCB. However the right and mcb was not in my DBS Vicker portfolio but in my CDP portfolio.
Appreciated you could advise
1) How can i exercise it ? I would like to convert my
Right to Share and sell out my MCB.
2) If i dont want the MCB am i correct i can just ignore it since it value $0 and it
will just expire on 21/5/2020?
Thank you so much .
1) wait for the letters with the instructions in them.
2) yes
Hi,
Thanks for the very detailed explanation! Just wondering, If i decided to just take the right share and not the rights MCB, is it okay to just let the rights MCB expires?
Yes.
Hi,
1. Kindly advise where to see the selling price if I want to sell Right issue and MCB ? Do we need to pay brokerage fees for selling off right issue and MCB right ?
2. If I want to exercise Right shares (paying $3 per share)and MCB ($1 per right) , both need to pay brokerage fees too? Thanks ????
1. on your trading platform.
2. no need.
Hi Alvin,
If I were to buy 1000 MCBs now, costing me $1000, after 10 years, it converts into 373 shares at a rate of $4.84.
But if at that point, the share price is $2, then 373 shares is worth only $746. Would I have lost $254 instead of earning $810?
I guess what my question is, if SIA can change the rate of shares being converted at the end of 10 years, what is stopping them from converting into one that really benefits SIA?
If the share price is at $2, they may change the conversion price lower. You get $1810/2 = 905 shares.
Hi Alvin,
I have used SRS through DBS to buy SIA shares; however, I can’t see the allotted ‘Rights Shares’. May I know where I can see the Rights?
You have to ask your agent bank.
Brilliant thanks for the explanation Alvin! Bought SQ shares years ago with cash. 2 Qs pl:
1. Can I exercise/pay for my Rights Shares and Rights MCB using my SRS. Cos there’s no option to pay via SRS on form sent to us so does that mean I need go to my bank to sort it out?
2 Also, can you redeem your MCB Shares before maturity at 10 years?
Many thanks.
1) Yes. Your agent bank should send you the letter. You can check w them too.
2) No. Only SIA can redeem.
Hello Alvin,
I have 1200 SIA share hence have 1800 of right shares.
1) What will happen for the right share value in CDP account if I leave it without exercise after 28.5?
2) can i exercise my rights partially (i.e. buying @ S$3 per share for 900 right shares let say)
3) where can I exercise this i.e. at most of the ATM?
Thanks
1) They will disappear and you get nothing.
2) Yes
3) Yes
Hi Alvin,
1. I’ve 41,000 MCB R & 21,000 Rights. If I keep & exercise all before 28 May does it mean I need to spend $104,000?
2. If I decide to sell all MCB R, roughly how much will I get back after deducting all admin cost?
3. If I decide to sell all Rights, roughly how much will I get back after deducting all admin cost?
4. When is the latest I must sell all of them if I decide not to buy/exercise them before 28 May?
5. What does it mean if I take no action at all?
Please kindly advise. Thanks.
1. yes
2. 41000 x $0.001 = $41. Comms $28. You get back about $13.
3. 21000 x $0.82 = $17220. comms about $60. You get back about $17160. Please note it depends on the trading price you sell and your brokerage rates.
4. 21 May
5. That’s the worst you can do. Either exercise or sell. However, MCB Rights can be disregarded since they are not worth to sell if you dont want to exercise.
Hi,
Appreciate if you could show us video clip on how to sell the right issue and MCB issue in the market, not sure the procedure. Thanks !
you can check with your broker because each platform is different!
for the MCB after 10 years. every 1000 will be worth $1.81 and converted into $4.84/share = XX..
most likely. this number is not multiple of 100. (odd lot)
what is going to happen to the odd lots?
should still be converted. only fractional shares (sub 1 share) disregarded.
Hi Alvin,
I have 8850 MCB. Is it advisable to exercise it rather than to sell it? Because if I sell now only cost about $18.
Please advise. Thank you.
Not worth it if you have to pay commission higher than $18.
Hi Alvin,
Assuming I have 35,400 MCB rights and if sell at 0.002, beside paying brokerage fee, is it worth it or just leave it to expire?
Is it ok to sell half of the SIA rights and buy the other half?
How much i have to pay if I intend to buy 9,000 rights?
Thank you.
You can let them expire because it might not be worthwhile to pay brokerage to sell them off. Esp at $0.001. Whatever you sell the proceeds are just enough to pay brokerage.
YOu can partial sell the SIA rights shares.
$3 per rights share to convert to a SIA share.
Thank you Alvin for your reply.
Can I ask one last question.
After buying SIA rights, can I hold it for few years then sell?
Thank you.
No. You have to exercise the rights by 28 May
Hi Alvin,
Good day to you
Assume I have 10000 Rights.
Can I do partial ?, meaning I sell 5000R
to the market by 21 May and
exercise my remaining 5000 R at $3
by 28 May?
Yes
Hey Alvin
Thank you for creating this forum.
Is it correct the interest earned for the $1000 after 10 years is 81%
yes. but not in cash.
Hi Alvin,
pls refer to the below URL:
https://www.singaporeair.com/en_UK/sg/about-us/information-for-investors/rights-issue/
Applying for Singapore Airlines Rights Issue
You may apply for your Rights Shares and/or Rights MCBs at an ATM of a Participating Bank, through the Central Depository (CDP) or the Share Registrar. You may also apply online.
Are aware of this? we can apply Singapore Airlines Rights Issue even you are not holding any Singapore Airlines Rights?
You have to have the rights first. You have to buy the rights from the open market if you are not a SIA shareholder and pay to convert the rights to shares / MCBs
Why is the price of the Rights MCBs should trade close to $0?
The rights cost $1 to convert to MCBs.
The MCBs are worth $1.81 in 10 years time.
Imagine the rights MCBs trade at $1. And thereafter pay another $1 to convert. Total $2 paid to get $1.81 in 10 years. Who would do that?
Also the max yield is 6% if you paid $1. The higher the price you pay, the lower the yield. And it is not possible for MCBs to yield at 2% like our Singapore Government Bonds. Hence the price for the rights cannot be high at all.
Hey Alvin
After 28 May, will the MCB be listed in SES for trading.
Thank you
MCBs will be listed in early Jun.
Sorry typo, should be SGX
Hi Alvin
Can’t seem to find an answer to my question — for non-shareholders to get the rights issue, can it only be done through the secondary market? I.e. at ~80c now and pay $3/right to convert eventually
If so, what is this application for? https://www.singaporeair.com/rights/intro — It states right issue can be bought at $3?
Sorry to be clear, I want to ask if this website is for existing shareholders only or non-shareholders can apply as well — https://www.singaporeair.com/rights/intro
You need to hold the rights to apply.
A non-SIA shareholder can buy the rights from the open market and pay to convert.
Yes you can buy the rights in the open market and pay to convert them later even if you are not a SIA shareholder.
Hello
I still haven’t received any news from standard chartered where my sia shares are held. How do I go about exercising the rights shares? I know I want to take them all up. Do I just go to an ATM? What function would I be looking for? Thanks.
You have to check with Stand Chart.
Hi Alvin,
I have around 1000 shares in bought under my CPF investment account (Via UOB) bought last year.
1) With this rights issue (even if I don’t take up the offer), it will mean that my current shares will still be converted to 1500 shares in my CPF investment account, correct?
2) When I see the update in the numbers of shares holding?
Thanks!
1) No. You get 1500 rights shares. You need to pay $4500 to convert these rights to 1500 SIA shares.
2) If you dont pay you get no shares.
on the CPF rights, if i don’t wish to subscribe, do you know if I can sell it on the market via CPF or cash?
can sell via CPFIS
Hi Alvin
I have 6750 rights in my CDP account, an hour ago I tried to convert 1000 rights into SIA mother shares, in the ATM it shown my ATM is linked to CDP. However when comes to final step, the ATM says transaction cannot proceed. Do you know the reason ?
I am not sure what’s the error. You have to check with CDP or your bank.
Hi, Alvin
I just bought the MCB, the amount paid by dbs pay now already, But I don’t own any SIA share, Is this OK?
You have to buy the rights MCBs from the market then pay to convert them to MCBs at $1 each.
Hi,
May i ask, how do i sell off the rights shares and MCB rights? Is it also done through ATM or other online platforms?
Thanks!
Sorry one more question, where do we see how much can the rights shares and MCB be sold for? is it through the ATM?
sell through brokerage platform
brokerage platform
I have 3000 rights and 2950 MCB rights in my DBS SRS Account and I have received the letter to exercise these and the MCB.
1) How do I sell the rights that are in SRS? I can sell via my broker MKE?
2) same as previous questions basically selling the MCB rights does not make sense if total value is less than brokerage fees , correct?
1) if it is linked to your SRS account
2) yes
Hi Alvin, why do you think rights are trading at a discount from mother shares? For eg. rights at $0.65 = Shares at $3.65 vs mother share at $3.80, almost 4% cheaper. Transaction costs apply to both buyers and sellers, so this must mean there are alot of holders of rights who don’t want to exercise. But shouldn’t they sell their main shares instead?
Thanks in advance
because the rights have no value after 21 may if there’s no intention to convert them. SIA shares are still SIA shares after 21 May. So you sell the ones that will become worthless.