AGL - AGL Energy
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skc
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Re: AGK - AGL Energy
Pretty simple. The announcement of the 1 for 5 was for those who held shares at 25 August. So if you held, say 2,000 shares on that date, you would be entitled to 400 shares @ $11 per share. Sell 400 shares on market at about $14.30 and take up the entitlement offer at $11.00: excluding brokerage you pocket $1,320 ($5220-$4400.)
PS: There would be CGT involved but, in my case, I have been carrying forward a number of capital losses so that wasn't an issue for me. Wasn't concerned about the number of AGK shares I held overall as it is not a large part of my holdings.
Pretty simple. The announcement of the 1 for 5 was for those who held shares at 25 August. So if you held, say 2,000 shares on that date, you would be entitled to 400 shares @ $11 per share. Sell 400 shares on market at about $14.30 and take up the entitlement offer at $11.00: excluding brokerage you pocket $1,320 ($5220-$4400.)
PS: There would be CGT involved but, in my case, I have been carrying forward a number of capital losses so that wasn't an issue for me. Wasn't concerned about the number of AGK shares I held overall as it is not a large part of my holdings.
skc
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Re: AGK - AGL Energy
The rights issue was renounceable and new shares were not entitled to the last dividend. So when the stock went XE (ex-entitlement) you get, in your example, 400 AGKR in your account. The value of the AGKR traded exactly (share price minus subscription price and adjusted for dividend)... so if a holder wanted to maintain their 2000 shares holding, they simply sell their 400 tradable rights and receive the same economic benefit as the example you offered above. There was no "arbitrage" per se in this instance.
Sometimes there are opportunity for rights arbitrage... where you can buy AGKR and short AGK and pocket the difference. But in this issue the price difference rarely strayed beyond 2c so there wasn't much to be had.
The rights issue was renounceable and new shares were not entitled to the last dividend. So when the stock went XE (ex-entitlement) you get, in your example, 400 AGKR in your account. The value of the AGKR traded exactly (share price minus subscription price and adjusted for dividend)... so if a holder wanted to maintain their 2000 shares holding, they simply sell their 400 tradable rights and receive the same economic benefit as the example you offered above. There was no "arbitrage" per se in this instance.
Sometimes there are opportunity for rights arbitrage... where you can buy AGKR and short AGK and pocket the difference. But in this issue the price difference rarely strayed beyond 2c so there wasn't much to be had.
skc
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Re: AGK - AGL Energy
No worries Judd. You mentioned arbitrage and that will always stir my interest. I followed the AGKR/AGK potential trade very closely through the 2 week period so I was just asking to verify what you meant by arbitrage opportunity.
There are many variations to capital management (either raising or buy back) that offers arbitrage opportunities... and in this instance with renounceable rights the simplest way to gain some benefit was to just sell the rights.
Well that may be but you have to bear in mind, I am a simple soul and detest complications. It is why I followed the adage of "Learning from one's mistakes" and ceased attempting to trade many moons ago.
No worries Judd. You mentioned arbitrage and that will always stir my interest. I followed the AGKR/AGK potential trade very closely through the 2 week period so I was just asking to verify what you meant by arbitrage opportunity.
There are many variations to capital management (either raising or buy back) that offers arbitrage opportunities... and in this instance with renounceable rights the simplest way to gain some benefit was to just sell the rights.
Re: AGK - AGL Energy
Such convolutions when all this little black duck wanted to do was to raise cash to assist with the buy of a Gibson 335!
Such convolutions when all this little black duck wanted to do was to raise cash to assist with the buy of a Gibson 335!
skc
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Re: AGK - AGL Energy
Haha. I never thought of it that way. I guess the face value of the AGK was 6x higher than AGKR.
But the holding period was only 2-3 weeks...
P.S. I don't know that we receive cash rate on borrow
Haha. I never thought of it that way. I guess the face value of the AGK was 6x higher than AGKR.
But the holding period was only 2-3 weeks...
P.S. I don't know that we receive cash rate on borrow
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Re: AGK - AGL Energy
Hmm, an even simpler soul am I I hold AGK and didn't know where the AGKR even came from! Let alone, why they mysteriously disappeared a coupla days back, all without me doing anything...
Were they (the AGKR) created, and then subtracted when I didn't take up some kind of offer? Or were they partially converted from the AGK shares, and then sold without my involvement? If the latter, why didn't the settlement appear in my Comsec CDIA account? I know, I know, I should be able to tell by looking at any sudden drop that that happened with the AGK standard shares, but then again, there have been a few of those recently right? The candlestick experts at Comsec say it's a hot sell ATM, BTW.... what say the gurus here?
Hmm, an even simpler soul am I
I hold AGK and didn't know where the AGKR even came from! Let alone, why they mysteriously disappeared a coupla days back, all without me doing anything... Were they (the AGKR) created, and then subtracted when I didn't take up some kind of offer? Or were they partially converted from the AGK shares, and then sold without my involvement? If the latter, why didn't the settlement appear in my Comsec CDIA account? I know, I know, I should be able to tell by looking at any sudden drop that that happened with the AGK standard shares, but then again, there have been a few of those recently right? The candlestick experts at Comsec say it's a hot sell ATM, BTW.... what say the gurus here?
skc
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Re: AGK - AGL Energy
In this instance, if you do nothing, your friendly investment bank will undertake a "retail shortfall bookbuild" and you will receive some amount of retail premium on the entitlement that you didn't pick up.
But in other forms of capital raising, the do nothing option could be quite costly, so pay good attention to these things, read the booklet and ask questions here or your financial advisors.
AGK has been quite weak ever since they issued a profit downgrade on the back of the carbon tax being repealed... and not helped by a discounted capital raising to fund their acquisition.
Hmm, an even simpler soul am I
Were they (the AGKR) created, and then subtracted when I didn't take up some kind of offer? Or were they partially converted from the AGK shares, and then sold without my involvement? If the latter, why didn't the settlement appear in my Comsec CDIA account? I know, I know, I should be able to tell by looking at any sudden drop that that happened with the AGK standard shares, but then again, there have been a few of those recently right? The candlestick experts at Comsec say it's a hot sell ATM, BTW.... what say the gurus here?
In this instance, if you do nothing, your friendly investment bank will undertake a "retail shortfall bookbuild" and you will receive some amount of retail premium on the entitlement that you didn't pick up.
But in other forms of capital raising, the do nothing option could be quite costly, so pay good attention to these things, read the booklet and ask questions here or your financial advisors.
AGK has been quite weak ever since they issued a profit downgrade on the back of the carbon tax being repealed... and not helped by a discounted capital raising to fund their acquisition.
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On November 24th, 2014, AGL Energy Limited changed its ASX code from AGK to AGL.
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One for the Anti Fracking movement -
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This seems to have been a bit of a sleeper. When I looked earlier this week it was around the $20 mark, now down to the mid-$19 based on a profit outlook I guess. Initially bought this years ago and was quite annoyed with AGL management and the then dude from Alinta (Bob Browning) who I felt had both trashed a good steady income producing share - boring but stable. I last bought during 2009 at $13.50. It's been changing its focus over time which is rather attractive to me. Will watch on a "just in case" basis.
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AGL one of the better looking large cap 4 shorts in market atm , gravity is about to take hold imo . CPU on the list as well , will load some charts tommorow
skc
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Doesn't look too bad. I also have TWE and ALL in the same vein.
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Bit of a bump and run reversal look ( exhaustive ) , like it a lot . Extended on all my metrics and my FA man has targets way lower .
10 August 2017 2017 Full Year Result
23 August 20171 FY17 Full Year Result Ex-dividend date
10 August 2017 2017 Full Year Result
23 August 20171 FY17 Full Year Result Ex-dividend date
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That the wholesale price of electricity has almost tripled would likely be a factor as well.
You can't buy shares in Snowy Hydro, Hydro Tas or Energy Australia since they're not listed companies (SH and HT being government owned, EA being foreign owned) whilst the likes of Origin whilst listed are heavily exposed to gas prices (and Origin is short on its own generating capacity too). So of what's left AGL has been the "obvious" share to buy for those aware of the electricity price situation and seeking to profit from that.
I'm just commenting on some fundamentals there and will leave others who know more about charts to look at that aspect. Agreed that it has run up hard and looks ripe for a correction.
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Yeah for sure thats going to have a large effect , share buy back of 5% can only do so much but it likely takes a lot of the trader churn volume of the market so the effect is magnified , anyhow perfect storm for extended move .
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