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Friday, September 30, 2011

How to do bonus and split adjustment in Amibroker

When a company declares stock bonus or stock split, we get nasty gaps in stock charts.
On November 26,2009 Reliance industries’ stock become ex-bonus in the ratio of 1:1, that is 1 bonus shares for existing 1 share.
reliance chart before bonus adjustment
In Amibroker there is only one option available in ‘ Symbol’ menu and that is split. Split does the adjustment of stock splits as well as stock bonuses.
Amibroker requires how many new shares shall be received by the investors in lieu of old shares.
In the above case 1 bonus share for 1 holding share means there shall be 2 new shares for  previously held 1 share.
Thus ‘new shares : old shares ‘ ratio shall become 2:1.
In the symbol menu we shall click on the split option and feed the value as 2:1 followed by a click on ‘ok’ the button, and  we are done.
reliance chart after bonus adjustment
Amibroker also gives split ratio by default (based on its estimation) and the same should be neglected by the investor as it is often wrong.
Indian investors can check split/bonus information on the moneycontrol site.
On 15/3/2001, NALCO’s (National Aluminium Company) stock got splitted along with the stock bonus.
The stock was splitted from the face value of Rs. 10 to Rs. 5 and also became the ex-bonus in the ration of 1:1.
nalco chart before split and  bonus adjustment

We shall first do the split adjustment, Rs. 10 to Rs. 5 means, 1 old share  shall become 2 new shares, so the split ratio is 2:1.
In symbol->split we shall enter the split ratio 2:1 and shall click the ‘ok’ button.
Bingo ! We have done the split adjustment but bonus adjustment is still  pending.
As bonus was announce 1:1 that means there shall be 2 shares for previously held 1 share.
Again on symbol->split, we shall enter the split ratio 2:1  and a click on ‘ok’ shall do the rest.
nalco chart after split and  bonus adjustment

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