Friday, May 26, 2017

Investing in ICULS (loan stock) in Bursa Malaysia

When a public listed company wanted to raise fund from shareholders and/or investors, it can either do it by issuing new equities (rights issue, private placement) or by issuing new loans (ICULS, bond).

Normally, to encourage subscription, free warrants are attached together during issuance, which will be detached and traded individually in the share market upon listing.

ICULS (Irredeemable Convertible Unsecured Loan Stock) is a kind of loan stock with the following 3 features:

  • Irredeemable: you cannot redeem it for cash.
  • Convertible: you can convert it into ordinary share at any time before its expiry, using the predetermined conversion method(s).
  • Unsecured: it is not supported by any collateral. In the event of bankruptcy, there is no guarantee that you can get back any money from your loan stock holding.
On top of that, ICULS has the following entities in common:
  • Expiry: similar to warrants, the ICULS will be burnt and of no value after its expiry date, if not converted into ordinary share. There may be a mandatory forced conversion upon expiry.
  • Coupon rate: a predetermined fixed coupon interest rate, payable periodically at least once per year to its holder.
  • Conversion method(s): traditional ICULS comes with a conversion ratio for its conversion to ordinary share. For example, a 2:1 conversion ratio means you need to use 2 ICULS to get 1 ordinary share. Nowadays, certain ICULS also provides a second option for holder to convert 1 ICULS into 1 ordinary share, by paying a predetermined conversion price (similar way with warrants).
  • Premium/Discount: similar to warrants, the ICULS is trading with a price. When the ICULS conversion cost higher than its mother share price, it is said to have a premium. Otherwise, it is at a discount. If an ICULS has more than 1 conversion methods, each method will have individual premium/discount.
ICULS can give you the benefits of a bond that pays interest, until it is converted into equity.

For example, PUC-LA (0007LA) is a 3-years ICULS listed in Bursa Malaysia within the period of 2016-2019. Click here to read its profile for important information about this ICULS.

It has a nominal value of RM0.05 and a coupon rate of 4% per annum, payable on annual basis in arrears. This means if you have PUC-LA, you will get an interest payment of RM0.05 x 4% = RM0.002 per ICULS per year. If you have 1 million PUC-LA, you will get RM2,000 per annum as the interest payment.

Its maturity date is on 15 February 2019, which is 630 days from today (26 May 2017).

Its conversion price is RM0.10, which can be exercised using either one of these 2 options:
  • By using 2 ICULS (nominal value at RM0.05 each) to convert into 1 ordinary share.
  • By using 1 ICULS (nominal value at RM0.05) and top up RM0.05 cash to convert into 1 ordinary share.

Upon expiry, any remaining ICULS not converted will be mandatorily converted into new PUC shares at the conversion price (RM0.05).

Today, PUC share price closed at RM0.155 and PUC-LA closed at RM0.100.

For Option 1 (2 ICULS for 1 mother share):

RM0.100 x 2 = RM0.200.

Since mother share is only at RM0.155, it has a conversion premium of RM0.200 - RM0.155 = RM0.045.

Premium at percentage = 0.045/0.155 = 29.03%

For Option 2 (1 ICULS + RM0.05 for 1 mother share):

RM0.100 + RM0.05 = RM0.15

Since mother share has higher price at RM0.155, it has a conversion discount of RM0.155 - RM0.15 = RM0.005

Discount at percentage = 0.005/0.155 = 3.23%

If you want to convert now, definitely you will choose Option 2 for conversion.

If a stock has an ICULS and also a warrant at the same premium/discount rate, ICULS will be a better option because:
  • Warrant won't get any interest nor dividend, while ICULS will get interest despite not getting any dividend.
  • There is only one way to convert warrant to mother share, which is by paying the conversion price. For ICULS, there can be flexibly more than one ways.
  • Warrant will definitely be burnt upon expiry if not converted. Certain ICULS such as PUC-LA will not be burnt as there is a forced conversion mechanism upon expiry.
So, in what situation you can consider buying an ICULS?
  • When the ICULS is in the money (has zero premium or at discount), and mother share price has the tendency to move up. You will be benefited with the gearing effect.
  • When mother share does not declare dividend. You will get coupon interest in ICULS.
  • If there is a premium, when the expiry date is not too near from now.

Disclaimer: This article is intended for sharing of point of view only. It is not an advice or recommendation to buy or sell any of the mentioned stock counters. You should do your own homework before trading in Bursa Malaysia.

Saturday, May 13, 2017

How to remove all hyperlinks in Ms Powerpoint presentation file with one click

When you copy-and-paste a picture from your local disk or from Internet source to your Ms Powerpoint presentation slide, you might unconsciously also created an embedded hyperlink inside the picture which link back to its source.

You might want to remove/delete all those hyperlinks in your presentation slides, as you don't want them to surprise you (and your audiences) in the middle of your presentation, in case you accidentally clicked on the picture and it starts to open up your web browser, searching and connecting to the source of that picture.

Well, you can remove the hyperlinks one by one, by right clicking on the picture and select "Remove hyperlink" from the popup menu.

However, it will be extremely tedious and inconvenient, as Ms Powerpoint unable to tell you which picture got hyperlink and which one doesn't have. You will need to check and unlink all of them one by one, and you are very likely to miss out some of them.

Here is a method which enable you to remove all those hyperlinks in the entire Ms Powerpoint presentation file at one go.

In this method, you create a simple macro program to automatically remove all the hyperlinks one by one at the background, and report back how many hyperlinks removed when it finished. When you save your presentation file, the macro won't be saved together so your file remains clean.

Step 1: Open your Ms Powerpoint presentation file.

Step 2: Press Alt+F8. That will open the Macro window.

Step 3: Enter "Rmlinks" as macro name (or any name you like, as it is for temporary use only), and click the Create button.

Step 4: Copy and paste the following codes into your macro editor.

Sub Rmlinks()
 Dim slide As slide
 Dim index As Long
 Dim counter As Long
 counter = 0
 For Each slide In ActivePresentation.Slides
    For index = slide.Hyperlinks.Count To 1 Step -1
       counter = counter + 1
    Next index
 Next slide
 MsgBox ("Removed " + CStr(counter) + " link(s).")
End Sub

Step 5: Press the F5 button on your keyboard to run. If it pop up another window, just click on the Run button to run.

Step 6: Press OK after seeing the result of how many hyperlinks successfully removed.

Step 7: You can now close the Macro window by clicking on the [X] in red at its top right corner, the same way you close any other windows.

When you save your file, the following dialog box might appear. Just press the "Yes" button.

Now, you have your Ms Powerpoint presentation slides the same as before, but clean from all the unwanted hyperlinks.

Saturday, May 6, 2017

The 5 Steps required to make your right decisions

Every now and then, we make decisions. Some are just small decision with minimal future effect, while some are significant and will change the history.

While we are aware that make the right decision is important, all of us cannot escape from having numerous occasions of making decisions which we regret later.

Patrick McDaniel of has written a report called "The Scientifically Proven 5 Step Process To Making Better, More Successful Decisions" which you can freely download here.

Below is my summary of what I've learnt from McDaniel's report.

1. Be open minded to all possibilities and options

  • If you have bias, your favoured choice could be a disaster.
  • Listen carefully to your inner self, or your God's guidance.
2. Expand your choices
  • Do not rely solely on single option, because that single option has 65% chance of likelihood leading to a bad decision.
  • Instead of looking through binoculars and fixating on the single, apparent option before you, it is better to take a 360 degree, 3-dimensional panoramic view of the situation and your possibilities.
  • Ways to increase your perceived options including:
    • Talk to others
    • Consider your opportunity costs
    • Remove the current option and think about what other way you could have
    • Mix and match possible options
3. Expose your bias
  • Don't be fooled by your own confirmation bias by:
    • Arguing the opposite with yourself
    • Seek a contrarian
    • Ask tough questions of your favoured option
    • Run a test to dip your toe in the water
4. Escape your emotion
  • Beware of your exposure effect (automatically and instinctively cling to the familiar).
  • Your fear of loss can be irrational.
  • You can be more rational by:
    • Prospecting the future
    • Defending your decision
    • Counselling others
5. Prepare for the worst
  • Beware of overconfident bias.
  • Run a premortem.
  • Set a tripwire, which could be time based or situation based.

Hint: Click on the "Older Posts" link to continue reading, or click here for a listing of all my past 3 months articles.