JPMor Indian S Share Discussion Threads

[bedsidemanner] 20/9/2009 22:22

Just listened to the Halifax share site explanation of subscription right issue and unfortunately still confused!
Please help:

1)If I purchase the JIIS will these then remain as subscription shares and follow the day pricing for JIIS - if so what is the market like for selling them if I wish?

2)Or once purchased do they then become normal shares at JII price? (am just being daft here?? and gain a profit)

Bedsidemanner

[olivepeel] 17/9/2009 09:07

good idea for a thread

[tarvold] 17/9/2009 01:52

Current position
Subscription price 227p
JIIS price 117.25 + sub price 227p = 344.25p vs JII price 351.5p.
This means JIIS is undervalued by 7p or an increase of 6.2% on yesterday's close.

[tarvold] 17/9/2009 01:51

JIIS are the subscription shares for JP Morgan Indian Investment Trust (JII) investing in Indian shares.

Terms of subscription shares are
227p Jan09-Jan10
247p Jan10-Jan12
292p Jan12-Jan14

Warning this is a leveraged share.
For every 1p rise in JII there should be a theoretical increase of 1p in JIIS
At the current prices (13/10/09 383p / 151.5p) this produces a leveraged position in JII of 2.5 times ie for every 1% increase in JII there is an approx. 2.5% increase in JIIS.


Bombay Stock Exchange site.


Conversion process.
In order to convert your JIIS shares into JII shares you need to contact your broker.
Your request needs to be submitted to JPM by your broker before the end of the month in order to be actioned in the next month.
If your JIIS holding is held in non certificated form (i.e. nominee broker) your JII shares will be credited to your nominee account the second working day of the month.
If your JIIS holding is held in certificate form your JII share certificate will be sent to you approx 15th of the month.

I held my JIIS shares in uncertificated form so the conversion payment was taken from my account the same day as the JII shares were credited. Presumably if you hold in certificate form you will need to send JPM a cheque or debit card details which would account for the extra 2 weeks.

Reason for converting
Part of my JIIS shares had hit my target price by there was a large (12p at the time) discrepancy between the theoretical and actual price of JIIS shares.By converting the JIIS shares I crystalised that difference as a gain.

Risk
The price of JII shares falls between submitting the conversion request and receiving your JII shares in order to crystalise the gain.

Suggestion
Action your conversion in the last week of the month to minimise exposure to price movements.