AIR - Air NZ.

[Beagle]

[QUOTE]

It has certainly been an embarrassment for NZ capital markets with the NZX screwing up this morning and many "investors" showing their lack of knowledge...

Remember Ben Graham...in the short run the market is a voting machine and in the long run a weighing machine

Anyone who doesn't know or believe that or ever forgets it has lost their way and has no compass.

[SPC]

Someone entered the wrong coordinates in NZX ?. Hapless investors subject to whiteout?. I think we've been here before..

[Beagle]

Someone entered the wrong coordinates in NZX ?. Hapless investors subject to whiteout?. I think we've been here before..

And it didn't end well

[alokdhir]

How AIRRG started trading today ? When record date is 7pm 5th April and that means not yet even issued ??

NZX website showing one trade of 600,000 rights traded today @ 0.66 Cents ...even ASB Securities website confirms this trade and price

I thought one is not allowed to trade securities unless already credited in your registry account ? Or can brokers / Institutions do trades in advance ?

https://www.nzx.com/instruments/AIRRG

[peat]

CMC sent me this

For renounceable rights issue for Air New Zealand, we do not allocate any rights to clients that are long or short, as they do not own the share but the CFD. We correct clients position's unit and entry price based on the adjustment factor for the corporate action, this is provided by Bloomberg and the factor is 0.612648.
The intention is that clients notional value prior to the corporate action will remain the same after this has occurred.

[Beagle]

Do you feel cheated Peat ?

[stoploss]

CMC sent me this

For renounceable rights issue for Air New Zealand, we do not allocate any rights to clients that are long or short, as they do not own the share but the CFD. We correct clients position's unit and entry price based on the adjustment factor for the corporate action, this is provided by Bloomberg and the factor is 0.612648.
The intention is that clients notional value prior to the corporate action will remain the same after this has occurred.

Not sure about that explanation . As for every share I was short I am now short 1.632 shares in my account .

[Arbroath]

How AIRRG started trading today ? When record date is 7pm 5th April and that means not yet even issued ??

NZX website showing one trade of 600,000 rights traded today @ 0.66 Cents ...even ASB Securities website confirms this trade and price

I thought one is not allowed to trade securities unless already credited in your registry account ? Or can brokers / Institutions do trades in advance ?

https://www.nzx.com/instruments/AIRRG

A share trade settles 2 business days after it is traded. Friday April 1st was the last day you could buy AIR and receive the entitlement to the rights issue because your shares had to be registered 2 days later which is by 5pm tomorrow April 5th which is the record date for the rights entitlements.

So today the shares started trading ex-rights and AIRRG started trading because if you had bought or owned 1,000 AIR on Friday then you have the ownership of 1,000 AIRRG which gives you the right to buy another 2,000 shares at 53c each. If you sold your AIR today that trade won’t settle until Wednesday April 6th after the record date but you’d still own the AIRRG which is why they could start trading today.

[Balance]

Not sure about that explanation . As for every share I was short I am now short 1.632 shares in my account .

Does that mean that you now have to cover 1.632 shares for say, the $1.26 share you shorted it on Friday?

Means at yesterday’s closing price of 90.5c, you now need to pay $1.47 (loss of 19c) to cover your short?

Air closed on Friday at $1.26 cum rights so at yeaterday’s closing price of 90.5c, the share is actually up 39.5c on my calculations - so CMC calculation is working in your favour.

[Balance]

Further clarification to the clarification yesterday on AIRRG!

So the rights issue is effectively a 1:1 at $1.06! Not as deeply discounted as was made out to be the case in the first place!

https://www.nzx.com/announcements/390065