Good
afternoon all,
There
were 7 warrants listed by RHB which expired on 30 Jan 2018 and many more
expiring in February. So what will happen to them and do you know whether you
will be getting any payout from holding the warrants until maturity? In this
article, you can determine exactly how much you will be getting upon expiry.
Step 1: Is my
warrant IN or OUT of-the-Money?
For a
call warrant, if the Settlement Price is above the Exercise Price/Strike, then
the warrant expires In-The-Money (“ITM”), otherwise it is considered
Out-of-The-Money (“OTM”). If the Settlement Price is exactly the same as
Strike, it is At-The-Money. You will only receive a cash payout for an ITM
warrant.
Step 2:
How much cash payout do I get?
The
following shows how to calculate the cash settlement amount for a call warrant:
( Settlement Price - Exercise Price ) / Exercise Ratio x units of warants held
( Settlement Price - Exercise Price ) / Exercise Ratio x units of warants held
Please take note that RHB charges an
exercise fee of 0.3% plus GST on the cash pay-out amount. The Settlement Price
is the average 5-day closing mother share price before expiry. For easy
reference, RHB will usually announce the Settlement Price and the calculated
cash settlement amount per warrant on Bursa website on the expiry date.
Example: DRBHCOM-C38
Exercise Price : RM
1.7800
Exercise Ratio : 2.5
warrants to 1 share
Expiry Date : 30
January 2018
Warrants held :
100,000 units
Settlement Price :
Average 5-day closing share price from 23 – 29 Jan = RM2.6200
Cash Settlement Amount :
(2.6200 - 1.7800) / 2.5 * 100,000 units
= RM33,600 –
exercise fee with GST
= RM33,493.15
RHB cash-settled
call warrants that expired on 30 Jan 2018
Call warrant
|
Exercise Ratio
|
Exercise Price
(RM)
|
Settlement price
(RM)
|
DRBHCOMC38
|
2.5
|
1.7800
|
2.6200
|
EWINT-CG
|
2
|
1.1000
|
1.0980
|
FGV-C32
|
2.5
|
1.6500
|
2.0020
|
JTIASA-CP
|
1.5
|
1.1500
|
1.1020
|
LCTITAN-CF
|
7
|
6.2800
|
5.1240
|
PCHEM-C11
|
5
|
7.1500
|
8.0080
|
SAPNRGC47
|
2
|
1.7000
|
0.7980
|
Term sheets for our call warrants are available
in the Bursa Website:
