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How to Capitalise on the recent Keppel Corp News

How to Capitalise on the recent Keppel Corp News

Last week, the major news was Temasek’s plan to offer Keppel shareholders $7.35 per share, in cash, to buy 554.9 million shares or 30.55% of Keppel.

 

Related imageImage result for keppel corp

This partial offer will raise its stake in Keppel from the current 20.45% to 51%.

Temasek will be doing this through its wholly owned subsidiary Kyanite Investment Holdings.

Prior to this news which was released on 22 October Tuesday, Keppel’s shares were halted on 21 October Monday.

When the trading halt was lifted on Tuesday, after the news was announced, Keppel’s stock soared more than 10%.

If you’d bought the Keppel Corp Long DLC on 22 October – it gave a 70% in just one day!

However, this is where it gets interesting – even if you got in late, by buying the 5x Long DLC on 22 October AFTER the news and the stock shooting up, the DLC still could have made you more than 20% within a few days.

This is the magnitude of serious returns we’re talking about.

So what’s this all mean for retail investors?

A Daily Leverage Certificate (DLC) is a type of leveraged product listed on the SGX which allows you to get leveraged return of an underlying single stock or index. The leverage is fixed every day, e.g. for a 5x Long DLC, every 1% movement in the mother share will lead to 5% movement in the LongDLC price.

So whenever you see a short-term trading opportunity, e.g. stock about to break out, index reaching support level etc., you can use DLC as a tool to get leveraged return. This recent scenario of Keppel exemplifies this perfectly.

4 key reasons why you should use DLCs:

  1. Simple trading instrument to get leveraged return of popular stocks and indices from Singapore and Hong Kong
  2. No account opening process required; trade it like a stock – simply go to your stock broker account to trade DLCs (subject to SIP qualification)
  3. LongDLC and ShortDLC – two types of DLCs allow you to gain from both ups and downs of the Underlying stock or index
  4. Lower barrier of entry – one lot of DLC is 100 shares, and the unit price is usually much cheaper than the mother share, allowing lower barrier of entry and more flexible allocation of your investment capital

Here’s the full list of DLC & the corresponding underlying securities every investor and trader needs to know: https://dlc.socgen.com/en/product/search

Our ongoing simulation competition for you to experience trading DLC with up to $15,000 worth of prizes for grab: http://bit.ly/SGATT2019

Where to trade DLCs for real?

Find your preferred broker below:

 

There’s also a free Technical Analysis workshop upcoming on Saturday, 2 Nov. Find out more here: https://blog.investingnote.com/multiple-time-frame-analysis-mtfa/


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Demystifying The World Of Derivatives

Demystifying The World Of Derivatives

We all know that the financial world is full of uncertainties and risks. To survive in an unpredictable market, investors need certain financial instruments to mitigate the risks that they are facing.

To mitigate this risk, modern finance has come up with a method called hedging. Derivatives are widely used to hedge against risks and uncertainties, although not limited to just hedging.

Derivatives have been increasingly gaining significance in the financial market. The popularity of derivatives has grown manifold since the year of 2000.

Here is an infographic for a quick overview of the derivative market and the difference between market makers and direct market access (DMA):

derivativee

What is a derivative?

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