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How Corporate Actions Affect Stock Prices More Than Anything Else

How Corporate Actions Affect Stock Prices More Than Anything Else

But first, what exactly is a corporate action? And why does it matter?

According to Investopedia,

A corporate action is any activity that brings material change to an organization and impacts its stakeholders, including shareholders, both common and preferred, as well as bondholders.

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Corporate actions includes:

  • Stock Split and reverse split (consolidation)
  • Spin-Offs
  • Dividend Payouts
  • Mergers and Acquisitions
  • Bonus Issue
  • Rights Issue
  • Share buybacks
  • IPO

Corporate actions are important source of indicators for the retail investors to monitor the company’s direction and effectively, the share price. There are some rules that investors and traders have to take note of, according to Li Guang Sheng (a top tier remisier and veteran community member):

  • Officers and employees of the Company two weeks before the announcement of the Company’s financial results for the first three quarters and one month prior to the announcement of the full year results (“Black-out Period”). Usually there will be internal memo to notify and remind all Directors, officers and employees of the Company on compliance with the best practices on dealing in securities pursuant to Listing Rule 1207(19)(c), in not dealing with the Company’s securities during the Black-out Period. The Company, its Directors and officers should be aware that the Company should not deal in its own securities (including undertaking any share repurchases) during the Black-out Period. Therefore, the Company would wish to complied with the Listing Rule 1207(19)(c) and not run foul with SGX.
  • If the players of the company shares belong to insiders, then during this period there may be less buyers and harder for you to run or sell your shares. Also if the company is undergoing share buyback and supporting the share prices through daily share buy back, the price may tank during the 2 weeks of no buying from the company or 4 weeks if it is the full year listing result period. So for those who trade heavy, be prepared to reduce your position 2 weeks prior to quarter result announcement due to less liquidity.
  • Also take note on listed company share buy back rules,
    • a) on-market purchases should not exceed 5% above the average closing market prices of the share over the last five market days;
    • b) details of purchases to be released to the SGX-ST, if it is non-market purchases, by 9am on the next market day, or, if an off-market acquisition, by 9am on the second market day after the close of acceptance.

Watch this quick video of Guang Sheng where he explains why corporate actions are so important:

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Workshop: Build your DIY investing portfolio with 10 Simple Steps

Workshop: Build your DIY investing portfolio with 10 Simple Steps

This latest workshop in our series, is all about helping retail investors focus on key criteria in the stock selection and portfolio allocation process by using a solid checklist.

Serious investing requires the investor to do his homework.

Every piece of homework done needs to follow a structure. Like the great Benjamin Graham and Warren Buffet, great investors always have a plan.

Like the saying goes…”Failing to plan, is planning to fail.”

This is the workshop that teaches you how to plan your portfolio, by first creating the most crucial part of the plan: the checklist.

Whether you’re a totally newbie or an experienced investor, having a solid investing checklist is necessary because it will set the criteria, tone and structure to pick the best stocks and also manage the worse threat faced by investors when it happens – Fear.

In this session, we will share with you how you should build your own portfolio using this 10-step checklist.

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Top 11 Things Every Investor Must Know

Top 11 Things Every Investor Must Know

Top 11 Things Every Investor Must Know (before they really start stock investing).

Just to provide some context on why we decided to create this infographic; over the weekend, we attended the SGX’s My First Stock Carnival, held at Vivocity. This carnival was attended by many people who’re interested to start their investing journey.

SGX My First Stock Carnival
SGX My First Stock Carnival

This is a carnival meant for helping both the young and old to get started on investing in their first stock.

SGX My First Stock Carnival
SGX My First Stock Carnival InvestingNote

We also presented on how Fintech can help speed up the learning journey of a budding investor. Most investors do fundamental analysis (FA) for their stock selection criteria. There’s also global macro analysis which is essential in letting investors know about the overall sentiments of the stock market.

So, to help more people to increase their financial and investment literacy, we’ve created an infographic about the Top 11 Things Every Investor Must Know (before they start stock investing).

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Hyphens Pharma IPO: Here’s 5 Quick Things You Need to Know

Hyphens Pharma IPO: Here’s 5 Quick Things You Need to Know

This post was original posted on smallcapasia.com and reproduced with permission from the author.

Hyphens Pharma IPO: Here’s 5 Quick Things You Need to Know

Hyphens Pharma is a speciality pharmaceutical and consumer healthcare group with a direct presence in five ASEAN countries, namely, Singapore, Vietnam, Malaysia, Indonesia, and the Philippines.

The company was incorporated in Dec 2017 as a private company. It sells speciality pharmaceuticals, a proprietary range of dermatological products and health supplement products through Hyphens and Ocean Health Singapore, and medical hypermart and digital supplies.

You can find the prospectus here.

Here Are 5 Quick Things you need to know about the IPO:

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InvestingNote Workshop Series: Growth Investing Workshop

InvestingNote Workshop Series: Growth Investing Workshop

InvestingNote Workshop Series: Growth Investing Workshop

Hi everyone, the next installation of our monthly workshop series is happening on the 28th February, Wednesday.

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This time, it’s all about Fundamental Analysis: G.A.R.P Strategy.

In Fundamental Analysis, there’s 2 camps: Value and Growth Investing.

While the former looks at stocks trading below their intrinsic value, the latter focus more on the future potential of a company.

What if you can combine tenets of both growth investing and value investing to find Undervalued stocks with sustainable growth potential?

That’s where great investors use the Growth At A Reasonable Price (GARP) Strategy.

This is the workshop which you will learn how to use the GARP strategy to maximise your stock investments.

Conducted by James from SmallCapAsia @Smallcapasia will teach you:

✔ What is GARP Investing
✔ Who are the proponents of GARP approach
✔ Characteristics of GARP stocks
✔ 1 Quick Way to value a GARP stock
✔ How to Value-add with 2 Important Indicators
✔ 3 Case Studies using GARP strategy

**Early-bird discount: GET $10 OFF**

Use code: EB100

Register Now, Come Later!

We’d see you there!

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The Beginner’s Guide to Understanding The 3 Financial Statements

The Beginner’s Guide to Understanding The 3 Financial Statements

All listed companies on SGX are mandated to report their financial performance periodically. Every quarter, companies must report their financial performance using a structured set of 3 financial statements. The financial statements adhere to international accounting standards and the local Singapore reporting standards have very similar formats making it easy for investors to review.

40cb66be628343902b3f21fbe1989c5c_xlThis post first appeared on ProButterfly.com on 12-Dec-2017 and also on InvestingNote. It was written by our veteran community member, Tam Ging Wien, author of REITs to Riches: Everything You Need to Know About Investing Profitably in REITs.

We decided contribute to the InvestingNote community with an educational piece to demystify the 3 financial statements.

When read with begin with A…B…C…, when we sing with begin with Do… Re…Me…

That at least how the song lyrics go.

But when we want to understand and assess the financials of a stock, we need to begin with the 3 financial statements, namely:

  • Balance Sheet (or Statement of Financial Position)
  • Income Statement (or Profit/Loss Statement)
  • Cash Flow Statement

Financial statements are reported based on time periods. By reviewing the 3 financial statements, investors are able to deduce the financial position of the business and how its financials have changed over time.

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A Sneak Peak at the No Signboard IPO

A Sneak Peak at the No Signboard IPO

Seafood restaurant chain and brewery business group – No Signboard Holdings is seeking a Catalist listing to raise up to $35mil. Based on preliminary information, this could potentially value the company at approximately $130mil.

This post first appeared on ProButterfly.com on 13-Nov-2017 and also on InvestingNote. It was written by our veteran community member, Tam Ging Wien, author of REITs to Riches: Everything You Need to Know About Investing Profitably in REITs.

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Based on information available, ProButterfly understands that No Signboard Holdings is currently in the book building exercise phase to place out its shares.

ProButtefly understands that No Signboard Holdings is targeting a listing by 30-Nov-2017.

The deal size is for 125mil shares at a price range of 23c to 28c per share. This would place its total raised to anywhere in the range of $28.75mil to $35.0mil.

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Analysis of Keppel KBS US REIT IPO

Analysis of Keppel KBS US REIT IPO

A joint-venture (JV) between Keppel Corporation and KBS Pacific Advisors is seeking to raise $448mil in a Singapore initial public offering of Keppel-KBS US REIT (KKREIT).

This post first appeared on ProButterfly.com on 31-Oct-2017 and also on InvestingNote. It was written by our veteran community member, Tam Ging Wien, author of REITs to Riches: Everything You Need to Know About Investing Profitably in REITs.

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The KKREIT is a Real Estate Investment Trust (REIT) which draws rental income from 11 office properties across 7 major US cities including Seattle, Austin, Houston and Atlanta. The assets are a mix of prime and sub-urban office spaces.

At the time of writing, KKREIT has just lodged a preliminary prospectus for a listing on the Singapore Stock Exchange (SGX) mainboard. There is a total of 262,772,400 (262.77mil) units on offer at a price of US$0.88 per unit. The IPO and trading of the units will be denominated in USD.

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Mapletree Industrial Trust Purchases a Portfolio of 14 USA Data Centres

Mapletree Industrial Trust Purchases a Portfolio of 14 USA Data Centres

You got to hand it to these government linked REITs.

This post first appeared on InvestingNote and was written by our veteran community member, Kyith from Investmentmoats.com.

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A few years ago, Ascendas REIT (5.8% dividend yield on my dividend stock tracker) decides to go forth and venture south to the land of Australia. They went in big, by enlarging their short land lease portfolio by 25% with Australia freehold assets.

They were able to finance such a large acquisition with a combination of rights issue, preferred shares and debt. The net effect is that they managed to lengthen the average land lease of the portfolio, the WALE, added some rental escalation and diversified the geographical region.

Some time ago this year, Mapletree Industrial REIT (6% dividend yield) announced that they would like to expand their mandate to manage data centers.

This evening, Mapletree Industrial REIT announced that they will be purchasing 14 data centers in the USA from the Target Portfolio of Carter Validus Mission Critical REIT.

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How To Catch Falling Knife Of Blue Chip Stocks Without Getting Sliced

How To Catch Falling Knife Of Blue Chip Stocks Without Getting Sliced

Catching Falling Knife Of Blue Chip Stocks In Singapore Without Getting Sliced

This post first appeared on InvestingNote and was written by our verified community member, Li Guang Sheng.

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This weekend, I will be sharing my thoughts on catching falling knife blue chips like M1, Star Hub, SPH and Raffles Medical Group. Usually, for stocks that fall so much within a short period, there is a reason and usually is due to change in fundamentals such as profit, growth or potential future earnings look bleak. In my opinion, if a retail investor who hates to see paper losses should wait a bit more before burning their cash as analyst reports are usually negative on them hence funds are selling. There is no point in catching a falling knife for them as there is a possibility of further pain in such shares. Is better in my opinion for such retail investors to chase high and buy when fundamental improve than to bottom fish. There is no one size fits all investment strategy for all. For me, I prefer to bottom fish as there is more upside potential but the risk is paper losses in some counters when they continue to fall.

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