Q&A for Pchem - WA

Q: What is Pchem - WA?

A: Pchem - WA is an Europe call warrent at RM 5; the term is 5:1. Expiration date is at Aug 2011. and cash settle.

Q: What is that means?

A: Europe Call Warrent meaning, you can only Exchange the warrent to the mother share on the expiration
    date.

    Term 5:1 meaning, 5 warrent is to exchange to 1 mother share

    Expiration date meaning, the Warrent will expire. or de- listing at Aug 2011.

    Cash Settle, at the expiration date, you will not get any share, it is all cash settle.

    So the fair value to calculate for this warrent to be equal to mother share is:

    5 x W + RM5 = Mother Share (Pchem)

Q: Why people buying this warrent?

A: Warrent is a way to invest, whereby you can use small money to earn big money. Example, according to
     fair value, the warrent is currently at 0.20; and the mother share at RM 5. Let say mother share goes up
    0.10; the return is just 2%. The warrent should go up by 0.02; and the return is 10%.