Tuesday, February 25, 2014

AIMS AMP Capital Industrial nil-paid rights counter are listed

Thanks to a reader, I'm alerted to two new counters in SGX that is listed but not traded yet. These are the rights counter set up to allow holders of AIMS AMP Capital Industrial reit to trade their rights issues.

They are AIMS R (counter code: TZ7R) and AIMS R25 (TZ8R). AIMS R should have a board lot size of 1000 shares and AIMS R25 should have a board lot size of 25 shares. With the R25, any holders who don't want to hold odd lots can trade to buy/sell enough 25 shares to round up their holdings. The only thing that is not clear is whether there'll be another counter after the whole rights issue ended, with board lots of 25 shares, just to allow odd lotters to round up their shares after knowing their success with the excess rights application.

The problem with the R25 or the R is that these are only be traded during the nil-paid rights trading period from 27th Feb to 7th Mar 2014. The last date of application and payment for excess rights is on 13th Mar 2014. This means that only after the 13th will you know whether you had gotten any excess rights. By then, the R25 will have long ceased trading.

So, let's say your aim is to get round lots, there's two things you can do:

1. During the nil-paid rights trading period, you sell or buy enough AIMS R/R25, paying brokerage fees too, so that you end up with round lots. Then before 13th Mar 5pm, you go to ATM and pay that $1.08 for every rights shares that you own, after taking into account the amount that you buy/sell during the trading period. And you don't apply for excess rights at the ATM too, in case you get some and end up getting odd lots all over again.

2. Ignore the AIMS R/R25 counters totally. Before 13th Mar 5pm, you go to ATM to apply for excess rights to round off your odd lots, apply for excess rights above and above the ones needed for rounding and lastly to pay $1.08 for each rights share. Then you hope that you get your excess rights because nothing is guaranteed.

For me, nothing is going to change. I'm going to apply for excess rights to round off my odd lots, then I'm also going to apply for excess rights over and above what is needed for rounding. If I get it, that's great because my average cost is lowered per unit share. If not, so be it, because there's always a unit share market (at least for POEMS trading platform) that I can dispose my odd lots to. There's nothing fearful about odd lots.