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RIO - Rio Tinto

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vincent191 said:
Anyone care to guess how much those rights will be selling for? Around $30 with a further $28 to pay???
Click to expand...

The theoretical value of the rights is $28-87, based on a cum rights price of $72-34.
So a price tomorrow of $29 - $30 looks to be about right.
Unless, of course, the Dow takes another tumble tonight.

 
Hi I am newbie here.

With RIO closing at $73.23 today, is this the correct calculation for the theoretical price for RIO ex-rights?

( 73.23 * 40 + 28.29 * 21 ) / 61 = 57.76

Thanks.
 
Seldon said:
Hi I am newbie here.

With RIO closing at $73.23 today, is this the correct calculation for the theoretical price for RIO ex-rights?

( 73.23 * 40 + 28.29 * 21 ) / 61 = 57.76

Thanks.
Click to expand...

That's correct.

And the theoretical rights price is $29.47. ($57.76 - $28.29). It will be interesting to see how close to these prices the ex issue shares and rights open tomorrow.

 
Am I missing something please????

I bought 100 RIO today the 16th for $72.06 (Record date 22nd)
I sell my 100 RIO shares for $70.06 (lets say, Record date 23nd)

I qualify for the entittlement as I am holding RIO stock on the Record date of the 22nd.

I get 51 shares @28.29 and pay by the 1st of July

on the 10 July I will be able to sell my 51 shares.

as long as RIO does not tank below $30.29 I am ahead...

Seems to simple and I have spoken to several brokers and friends and no one really can give me a difinitive answer

Benwex
 
I think you get 52 shares!

Sounds pretty right to me. That's what I intend to do but might apply for more then my entitlement (if I can).
 

Refer to Oldblue's post above. RIO will be priced ex-rights at around $56 so its not free money
If your broker can't answer that truthfully (they might just be looking at commissions) then I think it might be time for you to change brokers!
 
gfresh said:
Unsure of the value of the buying in for rights issue for profit at present prices...

etc.. meaning avg buy price of $57.59 is poor.
Click to expand...

indeed could have bought on market for ~$57 if you wished this morning now it's gone ex-rights. Unfortunately buying after the announcement at above $70 and holding was not beneficial.
 
Besides ringing up my broker where else can i findout what the rights are trading at. Anything on Commsec?
 
I'm with comsec. Do we only get to trade the rights on the 22nd or something after T+3? It's still not on comsec........................
 
alter1217 said:
I'm with comsec. Do we only get to trade the rights on the 22nd or something after T+3? It's still not on comsec........................
Click to expand...

the code is RIOR - go forth and buy and sell. You should be able to calculate your entitlement based on your current holding.

make sure you read the entitlemnt doc on how to dispose of rights from a CHESS holding though.
 
JAS81 said:
the code is RIOR - go forth and buy and sell. You should be able to calculate your entitlement based on your current holding.
Click to expand...

I tried to place a sell order of $35 for 47 rights (based on my entitlement) just to see what happens and comsec tells me "insufficient CHESS holdings"...
 
Anyone knows when the rights are actually tradable?
I know the trading of rights is commencing today (17th) but they don't appear in my portfolio
 
alter1217 said:
I tried to place a sell order of $35 for 47 rights (based on my entitlement) just to see what happens and comsec tells me "insufficient CHESS holdings"...
Click to expand...

Sorry - must be mis-information then. Try the Rio Shareholder helpline 1800 813 292.

they will be able to tell you if they arrive T+3
 
oldblue said:
That's correct.

And the theoretical rights price is $29.47. ($57.76 - $28.29). It will be interesting to see how close to these prices the ex issue shares and rights open tomorrow.

Click to expand...

Head shares and rights are trading close to theoretical values.

Heads at $57.82 when I last looked, rights at $29.60.

No screaming bargains yet!

 
RioR seems pretty liquid, i dont think you will be able to take advatange of arbitrage with the rights issue. Then again it could succumb to selling pressure on the last day.
 
jinx888 said:
RioR seems pretty liquid, i dont think you will be able to take advatange of arbitrage with the rights issue. Then again it could succumb to selling pressure on the last day.
Click to expand...

That's probably right.
Too many eagle eyes watching that situation and the rights only trade for a week. I'm looking more for an overall weakening of the shares/rights but the chances of that look pretty slim too.
 
I will be looking at buying the shares outright (if the price is right) rather than muck around buying the rights. If the difference is only 10 or 20 cents I rather not take the risk in buying the rights and then risk something mucks up and lose the $30 for each right.
 

Sometimes the price of the rights is overpriced. You can always sell the rights then buy the shares instead. You have to watch constantly, there was a pricing difference of around 50 cents at one stage, altho you have to be quick timed, not really worth it unless u have larger holdings.
 
On 16 June 2009 Rio issued the linked letter: imagesignal.comsec.com.au/asxdata/20090616/pdf/00961065.pdf

Question. It mentions that persons registered as holding Rio Tinto Limited shares
as at 7.00pm on 22 June 2009 (Melbourne time) (the Rio Tinto Limited Record Date) and who are eligible to participate in respect of those shares may subscribe for 21 new Rio Tinto Limited ordinary shares (New Rio Tinto Limited Shares) for every 40 Rio Tinto Limited shares held as at the Rio Tinto Limited Record Date at a price of A$28.29 for each New Rio Tinto Limited Share,
subject to the restrictions set out (see letter).

I'm fairly new to this and do not understand (a) why the expected price correction happened today (17 June) and (b) can I keep buying Rio up until the time and date mentioned and qualify.

Appreciate a simple explanation.
Murray
 
Okay I've got this cleared up.
from http://www.commsec.info/riorightsissue/apply.aspx

So yeah... that's what comsec ppl have to do if they want to sell 'em
 
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