JPMor Indian S Share Discussion Threads

[tarvold] 12/3/2010 14:16

This share price is becoming annoyingly stubborn!

[tenapen] 01/2/2010 18:19

JPMorgan Indian Investment Trust plc announces that today it issued 41,681 ordinary shares following the exercise of conversion rights by a number of uncertificated subscription shareholders.



The shares in issue following this notification are 115,036,129 ordinary shares, including 1,979,788 held in treasury, and 10,977,414 subscription shares.







1st February 2010

[chrisgail] 11/1/2010 20:35

Ord Shares 404

Subscription Shares = 1 ORD at 247p up to 31/12/2011

Maths 404 - 247 = 157p

Today at a discount to the NETT WORTH this is very inefficient.

[tarvold] 30/12/2009 12:45

Looks like the 20p change in the subscription price effective 2nd Jan is being factored in early.

[aldasoa] 22/12/2009 09:51

tarvold, your 20p is now factored in. Good prediction!
Edit: No it isn't, my mistake.

[tarvold] 14/12/2009 08:37

JIIS is really starting to lag JII, at this rate the 20p will be factored in by 1st Jan.

[tarvold] 11/12/2009 12:18

JIIS needs to play catch up, JII up 6p today.

[tarvold] 04/12/2009 22:45

Not always, capital markets are inefficient.

[tonco2] 04/12/2009 19:06

Convert, sell or buy more?
This sounds as though I want advice but what I would really like is an equation or similar so that I can understand what I'm doing. Although I've invested for many decades, I've never used leveraged products because I don't understand them sufficiently. I received these for 'free' and I have some 'free' BRNS as well. Every so often I think I will try to get into some form of leveraging so I'm quite happy to have these for educational purposes. I understand the concept of leveraging but the variable prices at different times confuse me and I don't really understand why there would be any point in converting them rather than just selling them at some stage as the total price for converting them is surely always going to be similar to buying the 'proper' shares direct, isn't it?

[tarvold] 16/11/2009 00:20

Yes you are correct in theory on the 2nd of Jan the price should drop 20p, whether it does or not is yet to be seen but I doubt it will fall that much.
The market is not that efficient and there is always a certain amount factored into the price of subs shares for the time until they lapse.
If you look at JMCS for instance the price of the subs shares are 25.75p with a conversion price of 143p with the JMC share price only 139.25p. In theory JMCS should be trading at -4p.
JMGS trade at 68p conv price 422p with underlying share price 471.4p, in theory they should be trading at 49p not 68p.

[tuning peg] 15/11/2009 20:03

If the terms of the subscription shares are correct does it not follow that other things being equal the sub share price should fall by 20p in January 2010 i.e because the base price goes up from 227p to 247p?

A 20p drop on the current share price is c 15%. Would be happy to hear others' views on this but potentially this could be a nasty surprise to anyone buying in now

[tarvold] 11/11/2009 11:12

Come on JIIS you're lagging the price of JII by 6p!
Took advantage in the correction in the Indian market to top up at 128p

[tarvold] 16/10/2009 02:12

Sorry you are correct, 227p is the current subs price.

[aldasoa] 15/10/2009 13:04

tarvold, according to the information at the top of the thread, the subscription price is 227p. This means that JII and JIIS are near enough priced correctly in relation to each other.

[tarvold] 07/10/2009 04:13

A disparity has again opened up between the pricing of the JIIS subscription shares and the underlying share JII.
JIIS 134.5p + subs price 227.0p = 361.5p vs JII 368p
JIIS is undervalued by 7p or 4.8% based on the mid price.

With Asia up today it could be a good time to buy JIIS.

[tarvold] 30/9/2009 01:46

JP Morgan currently have 3 more Investment Trusts with subscription shares JPSS(Japanese Smaller Comps) , JMCS (China) & JMGS (Emerging Markets).

The more usual way to get leverage in an investment trust is to buy their warrants. I've not looked into which IT still have warrants but about 10 years ago they used to be very popular. Effectively a warrant and subsription share are the same. Check out this website.



Split Cap IT also used to be widespread which were for a fixed period of time rather than open ended. These were IT which were split into Zero Preference (paid a fixed amount at end of the period) and Capital Shares (received all the remaining funds at the end of the period), you could also buy a 'unit' which was a combination of both.
The Capital Shares were high risk and more highly geared but got a bad reputation because people bought them without understanding how they worked.
JP Morgan currently do two of these Income & Capital Trust plus Income & Growth Trust.

By the way I don't have any connection to JP Morgan. I'm just familiar with them as my SIPP is with them, which is (off topic) a very good plan.

[triples] 29/9/2009 13:38

Does anyone know of other geared shares on Investment Trusts? TIA

[tenapen] 23/9/2009 18:10

A good new thread and a different perspective to investing in India.

The subscription shares fell less than the common stock today.
Subscription -0.4% to -2.4% for common stock

[cgequityinvest] 22/9/2009 09:02

I bought in recently following these share being highlighted in David Stevenson's "adventurous Investor" articles in the weekend FT.

I won't repeat the whole article but essentially he said that he believes India is one of the better "BRIC" (brazil, russia, India & China) economies and he looked at potential ways of capturing future growth.

His view of these subscription shares was :
* that they offered a good medium term option into the market
* the shares are effectively options on a volatile stock market thro to 2014
* In Jan 2014 you can buy the back into the ordinary shares at 291p
* If the ordinary share price doubles (from a then 337p - now slightly higher) to 670p then the warrants could be worth as much as 380p.
* He issues a health warning about what would happen if emerging markets crash and burn!

The article highlights the gearing impact and supports Tarvold's post above.

[bedsidemanner] 21/9/2009 07:24

Tarvold - explanation much appreciated and very understandable! Thank you.

[tarvold] 21/9/2009 01:58

There is a normal market to buy and sell JIIS subscription shares, it its not hugely liquid but trading a few £K is not an issue.

By buying these subscription shares you are buying the right to buy JII shares at a fixed price for the periods quoted in the header.
In order to convert JIIS shares into JII shares you need to pay the subscription price to the company, at the current time that price is 227p.

Why buy these subscription shares rather than the actual shares?
Well to put is simply leverage, the rise in the subscription shares as a % will be higher than the underlying shares.
eg
1p rise on £3 = 0.33% JII
1p rise on £1 = 1.00% JIIS.

Risk warning
Not only does the price of JIIS rise and fall at a greater % there is also the risk that if the price of JII falls below the subscription price of JIIS the shares in JIIS potentially become worthless if the period of conversion expires.