Maxis- four CWs issued!!!

Maxis- four CWs issued!!!: "Today is only the 7th day of the listing of Maxis on our exchange. On the 6th day of the listing of Maxis (last Thursday), we saw the listing of four Maxis CWs issued by OSK & CIMB (two CWs for each issuer). I am surprised by the timing & the speed at which these CWs were issued & the number of different CWs issued by each of the issuer. Suffice to say that both OSK & CIMB are comfortable with the reward-to-risk proposition of these issues. They must have formed an opinion that Maxis will not surprise too much on the upside.

Let's look at the CWs below. Basically, we can divide them into 3 categories:
1) very short-term & expiring in 2nd quarter 2010 (Maxis-CA);
2) medium-term & expiring in 4th quarter 2010 (Maxis-CB & Maxis-CC); and
3) long-term & expiring in 1st quarter 2011 (Maxis-CD).

One can say that Maxis-CB & Maxis-CC are comparable as their expiry dates are fairly close to one another and that Maxis-CC is preferred to Maxis-CB as the latter has a higher premium. Overall, the premium for all four CWs are relatively high, especially for an underlying stock that is currently trading at a high PE of 18 times (based on annualized EPS of 30.4 sen for FY2009).


Table: Maxis-CWs main terms & conditions

Technically speaking, Maxis appears to be in a very short-term "bullish price channel" based on the intra-day chart below. From the price channel, we can see that Maxis will have trend line support at RM5.38 & price channel resistance at RM5.53. As long as this price channel remained intact, Maxis price movement for the short-term is likely to be favorable.


Chart: Maxis' 15-min chart as at Nov 30, 2009_4.20pm (Source: Quickcharts)

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