How to Convert Warrant to Mother Share in Malaysia
•By Mahersaham Team
Artikel ini juga tersedia dalam Bahasa Melayu
Loading...
This article is a continuation of the previous article on What is a Warrant.
If you have not read it yet, you can click here.
The Inari warrant expired on 4/6/2018 at 5.00 PM. So for those holding the INARI WARRANT, what happens next?
DOES IT JUST BURN LIKE THAT?
JUST ACCEPT IT?
JUST GO WITH IT?
Above is a letter from INARI AMERTRON BERHAD addressed to NOTICE TO WARRANTHOLDERS IN RELATION TO THE EXPIRY AND LAST DATE FOR THE EXERCISE OF WARRANTS 2013/2018
One of the great things about investing in shares is that all the information is available. It is just a matter of whether we want to find out or not.
For those who did not know, the INARI WARRANT was created on 25 April 2013 and expired on 4/6/2018. This means many traders had already profited from this warrant beforehand. But nothing lasts forever. So every warrant that can generate significant profits will eventually expire as well.
In reality, before the warrant expires, a trader should already know the last trading day. For example, the last trading day for Inari warrant was 16/5/2018. Some traders may have forgotten or been busy and ended up holding the warrant until the expiry date. There are personal tips for trading warrants that will be shared in a separate post.
For those who ended up holding the warrant until the EXPIRY DATE — only you know how fast your heart was beating. It involves money after all! That is exactly why this article was written. In actual fact, you can CONVERT THE INARI WARRANT TO THE MOTHER SHARE. If you do not do this, your warrant will be 100% burned. For example, if you purchased warrants worth RM5,000 and did not convert, you would lose the entire RM5,000. That is a significant amount!
Here are the steps you need to take to convert a warrant to the MOTHER SHARE:
If you do not follow the steps above, your warrant will be burned. Only memories will remain.
In the warrant series, we have published several other articles to help clarify common confusion around the calculations and risks involved in warrant trading.
Articles you can read:
If your warrant expires without being converted, it will be completely burned — meaning you lose 100% of your investment in that warrant. There is no way to recover the value once the expiry date has passed.
To convert a warrant, you need to: (1) prepare a Money Order for the exercise price multiplied by the number of units you hold, payable to the warrant account; (2) prepare a separate Money Order of RM20 for the service charge payable to the registrar; (3) fill in the warrant exercise form; and (4) submit all documents to the registrar before the expiry deadline.
The exercise price varies for each warrant and is set when the warrant is first issued. For example, the Inari Warrant 2013/2018 had an exercise price of RM0.088 per unit. You can find the exercise price in the warrant prospectus or on the issuing company''s notice to warrantholders.
The last trading day for a warrant is usually several weeks before the actual expiry date. For example, the Inari warrant last traded on 16/5/2018 but only expired on 4/6/2018. Always check the official notice for exact dates.
What are you waiting for? Register for a CDS account with Mahersaham and you can join the exclusive class for Mahersaham clients.