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Why CDB.X price is higher than CDB.N

+4
Monster
hunter
Nigel.Machado
Sumudu Vithanage
8 posters

Go down  Message [Page 1 of 1]

1Why CDB.X price is higher than CDB.N Empty Why CDB.X price is higher than CDB.N Fri Jun 15, 2012 3:08 pm

Sumudu Vithanage


Stock Trader

Generally voting share price is higher than its non voting share.
E.g; Using today closing prices
BLUE.N0000 4.30 BLUE.X0000 1.90
CIC.N0000 85.00 CIC.X0000 60.00
HNB.N0000 149.00 HNB.X0000 92.50

but,
CDB.N0000 40.00 CDB.X0000 44.90

What is the reason behind this?????????

2Why CDB.X price is higher than CDB.N Empty Re: Why CDB.X price is higher than CDB.N Fri Jun 15, 2012 3:26 pm

Nigel.Machado


Manager - Equity Analytics
Manager - Equity Analytics

technicals(46mn voting shares vs 5 mn non voting share). funny scenario though.

3Why CDB.X price is higher than CDB.N Empty Re: Why CDB.X price is higher than CDB.N Fri Jun 15, 2012 5:34 pm

hunter

hunter
Moderator
Moderator

I remember same happened to MAL.N and MAL.X sometime ago.

4Why CDB.X price is higher than CDB.N Empty Re: Why CDB.X price is higher than CDB.N Fri Jun 15, 2012 6:46 pm

Monster

Monster
Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics

Generally voting share is trading above non voting share price. However, there is no rule that it should always trade less than voting value. It's always based on demand and supply. As @Nigel.Machado states, non voting share is much less than compare to the voting share. Hence, it's fair to expect the higher demand for non voting share.

5Why CDB.X price is higher than CDB.N Empty Re: Why CDB.X price is higher than CDB.N Fri Jun 15, 2012 7:05 pm

Antonym

Antonym
Vice President - Equity Analytics
Vice President - Equity Analytics

Monster wrote:Generally voting share is trading above non voting share price. However, there is no rule that it should always trade less than voting value. It's always based on demand and supply. As @Nigel.Machado states, non voting share is much less than compare to the voting share. Hence, it's fair to expect the higher demand for non voting share.
@Monster: I don't accept the 'demand and supply' logic... I think this is just one of the many anomalies in the CSE, probably due to ignorance... Take this example...

A shop sells Toshiba laptops.
All these laptops are identical; they are available either with or without a mouse.
The shop has 46 laptops with a mouse, but only 5 laptops without a mouse.
Why would anyone pay more for the laptops without a mouse?

(Replace laptop with share; replace mouse with voting rights.)

6Why CDB.X price is higher than CDB.N Empty Re: Why CDB.X price is higher than CDB.N Fri Jun 15, 2012 7:38 pm

ronstyn


Equity Analytic
Equity Analytic

Antonym wrote:
Monster wrote:Generally voting share is trading above non voting share price. However, there is no rule that it should always trade less than voting value. It's always based on demand and supply. As @Nigel.Machado states, non voting share is much less than compare to the voting share. Hence, it's fair to expect the higher demand for non voting share.
@Monster: I don't accept the 'demand and supply' logic... I think this is just one of the many anomalies in the CSE, probably due to ignorance... Take this example...

A shop sells Toshiba laptops.
All these laptops are identical; they are available either with or without a mouse.
The shop has 46 laptops with a mouse, but only 5 laptops without a mouse.
Why would anyone pay more for the laptops without a mouse?

(Replace laptop with share; replace mouse with voting rights.)

Good example, though I would say 46 laptops with warranty and 5 laptops without warranty.
Agree with Antonym I think this is pure ignorance.



Last edited by ronstyn on Fri Jun 15, 2012 7:50 pm; edited 1 time in total

7Why CDB.X price is higher than CDB.N Empty Re: Why CDB.X price is higher than CDB.N Fri Jun 15, 2012 7:47 pm

hunter

hunter
Moderator
Moderator

Probably supply logic holds even if it is irrational.

Why do we pay higher for nonfat milk and pay less for full cream?

8Why CDB.X price is higher than CDB.N Empty Re: Why CDB.X price is higher than CDB.N Fri Jun 15, 2012 8:38 pm

Slstock

Slstock
Director - Equity Analytics
Director - Equity Analytics

hunter wrote:

Why do we pay higher for nonfat milk and pay less for full cream?


Question is what is non fat here and what is full cream? CDB.X or CDB.N . Is full cream better than non fat or vice versa.

Maybe the answer depends on the person and the thinking. Right now whatever it is CDB.X seems to be better. But all I can tell you is one day CDB.N will trade higher when the real bull takes over.

Until such time...

9Why CDB.X price is higher than CDB.N Empty Re: Why CDB.X price is higher than CDB.N Fri Jun 15, 2012 9:25 pm

Whitebull


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics

Antonym wrote:
Monster wrote:Generally voting share is trading above non voting share price. However, there is no rule that it should always trade less than voting value. It's always based on demand and supply. As @Nigel.Machado states, non voting share is much less than compare to the voting share. Hence, it's fair to expect the higher demand for non voting share.
@Monster: I don't accept the 'demand and supply' logic... I think this is just one of the many anomalies in the CSE, probably due to ignorance... Take this example...

A shop sells Toshiba laptops.
All these laptops are identical; they are available either with or without a mouse.
The shop has 46 laptops with a mouse, but only 5 laptops without a mouse.
Why would anyone pay more for the laptops without a mouse?

(Replace laptop with share; replace mouse with voting rights.)

Simple isn't it ? Laptop does not need a mouse.

10Why CDB.X price is higher than CDB.N Empty Re: Why CDB.X price is higher than CDB.N Fri Jun 15, 2012 9:52 pm

Antonym

Antonym
Vice President - Equity Analytics
Vice President - Equity Analytics

Whitebull wrote:
Simple isn't it ? Laptop does not need a mouse.
Exactly my point...
The shareholder does not need to vote; that's an added benefit that should come at a extra price.
If he wants the benefit, he will buy CDB.N and pay more. Normally... Smile

(Btw, I am typing this on a Toshiba laptop with a mouse! Of course, I had to pay extra for the convenience of the mouse!) Wink

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