I owned Sembcorp Industries shares previously, and after the demerger received “free” Sembcorp Marine share at cost $0. SCI shares dropped accordingly and now there are huge “losses” for SCI transaction, as it doesn’t take into account the Marine Shares (which have N/A for gain/losses since cost is $0)
Any idea how to best handle this?
I figured out how to handle this:
For each share of SCI, you got 4.91 share of SCM at the theoretical price of 20c.
Value of Sembcorp Marine Portion: 4.91*0.2 = 0.982
Pre Demerged SCI = 1.94 (closing price on last day, 8th Sep)
Post Demerged SCI = 1.94-0.982 = 0.958 (In theory, SCI should drop to this price)
- Create a sell transaction on 8th Sep, sell all your SCI at 1.94
- Create a buy transaction on 8th Sep, buy back all the SCI at 0.958
- Create a buy transaction for the number of SCM shares you received, at a price of 20c.
The difference of step 2 minus step 1 should be equal to transaction value of step 3.