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Genting perpetual - anyone buying??
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iPunter
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02-May-2012 23:31
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Best is not to crack one's head over such investment analysis, etc...     Just simply play by the charts... because the more information one knows,           the more it is going to affect one's trading, which is the only thing that  matters...   |
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katak88
Senior |
02-May-2012 23:26
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Alternatively, Genting Sp can take the route of rights issue (as in 3 previous cases: 1 for 5 @ S$0.80 in Sep 2009 3 for 5 @ S$0.60 in Aug 2007 and offer of 5 for 3 @ US$0.13 in Feb 2005)  but there will be dilution to shareholders if they do not wish to take up their rights issues.   Another way is by placement of new shares to new investors, which again will dilute the shareholdings of existing shareholders.  For your info, the no. of existing Genting Sp shares is abt 12.2 billion shares and payment of current dividend rate (1 cts/shs)  will cost the company S$122m. Any increase in new shares via rights issue or placement will increase the absolute amount of dividend payment if the company wish to maintain the same dividend rate of 1 cts/shs.  
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iPunter
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02-May-2012 22:49
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There is no free lunch in this world... or 'big fat frogs jumping in the streets'... lol...  
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katak88
Senior |
02-May-2012 22:45
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I think it is win-win for the shareholders of Genting Sp and Genting Sp 5.125% Perpertual Securities.   The only losers are the bankers as Genting Sp take the route of Perp Sec instead of syndicated bank loans (which is dictated by terms & conditions of bankers and can be easily recalled during the bad times)   to raise the war chest of S$2.3 billion in Mar 2012 & Apr 2012 (S$1.8B to institution investors and S$500m to retail investors) for new project.    POSITIVE ON PERPETUAL  SECURITIES  • Improves balance sheet  • Offers financial flexibility  • Strong ability/incentive to redeem    Issuing up to S$500m of perpetual securities  Genting Singapore (GS) is offering up to S$500m worth of perpetual  subordinated capital securities for retail investors this may be  increased by another S$200m in the event of over-subscription.  Issued in denominations of S$1,000 each (minimum subscription of  S$5,000), the securities will pay a distribution rate of 5.125% per  annum (cumulative payable twice a year on 18 Apr and 18 Oct) and  this rate will increase to 6.125% per annum if the securities are not  redeemed on 18 Oct 2022.   Why perpetual securities?  First is the ability to treat the perpetual as “equity”, which would not  only increase its NTA (and overall balance sheet strength), but also  not lead to deterioration in its net gearing ratio. But most importantly,  the perpetual offers GS flexibility in managing its financials, given that  the perpetual is callable after 5.5 years on every interest payment  date.  Ability to redeem is strong  We believe that GS has the ability to redeem the perpetual, as RWS is  likely to be free of debt in 2017 and it should be able to generate  some S$1.2b of free cashflow per year. And should the interest rate  environment remains low, GS will also have the incentive to redeem  the perpetual. Meanwhile, concerns of GS deferring interest payment  are likely overdone, given that the perpetual comes with a dividend  stopper feature i.e. GS cannot pay dividends if the interest payments  are not made. Since GS has already started to pay dividend last year,  it is likely to want to continue paying dividends.    
http://www.remisiers.org/cms_images/research/Apr09-Apr13_2012/Genting-120413-OIR.pdf
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Jackpot2010
Master |
13-Apr-2012 14:57
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don't mind if i correct u here. Bonds are for rich & savvy investors (institutions) who hv spare cash and already invested enough $ in equity (shares) etc. Recently Genting issued $1.8 billion bonds solely to big boys in tranche of $250k minimum, now this latest offer is for retailers minimum lot size of $1k only. This is a very good investment. Bonds are suitable for those with spare cash to invest, i.e. those who already invested enough monies into stocks n shares etc., and looking for something different. This offer will be many times oversubscribed b'cos no rich n savvy investors will give this a miss. Oso, if u subscribe at IPO $1, u wont loss, can sell anytime at a profit, assuming $1.03 based on current low-interest rate environment, thus your money won't be stucked here perpectually.  (for more info, read ST article 9 Apr 2012 below):   Retail investors will finally get a bite of Genting Singapore's much publicised perpetual bond issue, after being left out of the first issue in March. The integrated resort operator had raised $1.8 billion in a highly successful exercise in March but the minimum subscription size was $250,000, leading to some rumblings that small-time players were being left out in the cold. But in its latest issue, announced by Genting Singapore on Monday, the subscription starts at $5,000, and investors will be able to subscribe in lots of $1,000 above that. The company hopes to raise $500 million from this exercise. 'This round is really for the retail investors, the man on the street,' said Genting Singapore's chief financial officer Lee Shi Ruh in a briefing. 'The purpose of this is really to tap on a different pool of investors.'
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Juzztrade
Veteran |
13-Apr-2012 14:15
Yells: "Techincal and long term investor" |
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If Genting have to pay 5.1% to bond holders. Then how about Genting Stock Holders.
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Juzztrade
Veteran |
13-Apr-2012 14:12
Yells: "Techincal and long term investor" |
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A bond with no maturity date. Perpetual bonds are not redeemable but pay a steady stream of interest forever. Worse than FD.  Your money is all tied up. If you sell, I dun know how much you will lose. |
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watergate
Member |
13-Apr-2012 13:43
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What is  perpertual bonds? Is the principal invested  tied to  share price? is the interesed fixed? | ||||||
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wangerism
Veteran |
13-Apr-2012 13:36
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this is to target retailers who dun know much bout financial products....those uncle and aunties on the street who put their $$$$ in savings acc.   |
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CrazGreed
Senior |
13-Apr-2012 12:16
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suggest dividend-paying reits...better than perpertual bonds.. MIIF, Suntec, at similar cost or even cheaper...definitely more than 6% yield price does not change much, quite stable  |
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john_ric
Senior |
13-Apr-2012 11:48
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interest > 5.1%. Anyone ??   |
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