@stockmaster With 100 shares you will get 10 rights not 100. However, buying 100 shares of a rights stocks is a strategy I use when I want to participate in a lowly priced rights issue but don't like the stock in general. Basically, buy 100 shares, get the rights allocated to you, pay for the shares, apply for a boatload of additional shares (as much I can afford), wait for the allocation (possible refund if oversubscribed), sell the additional shares quickly. I have done this a couple of times with DTB in 2007 getting shares at 70/- and selling at 87/-, HFCK in 2008 at 20/- and selling at 24/- among many others. Have to be careful to do it only when the dilution is not massive like in KCB 2010 or in a massive bear market like H2 2008, 2009.

Plus, when you buy the shares, you pay no commission. Only when you sell :)

@youcant............Yes i will, but will do it early next week as per his advice.

Happy Hunting.

Well the question is why did SM panic sell like that?

STANCHART RIGHTS ISSUE

According to the media advert placed by the company, the details are as follows:
1. Rights issue shares to be offered: 15,109,323
2. Target Amount: Ksh 2,499,837,490

From the above, the following can be concluded:
1. The offer price will be about Ksh 166
2. The shares will be offered at a ratio of 1 share for every 18 held (may be set at one for every 20 shares to avoid too many odd lots)
3. After rights, the total issued and paid up shares for Stanchart will be 287,077,133.
4. The shareholders approved 27M additional shares during the AGM. With only 15M on offer, what is the plan for the other 12M shares (so that the paid up share capital amounts to 300M as stipulated in the AGM?

I intend to pick up my rights as they are well priced. The half year results have delayed maybe because of the rights issue, but they will be very interesting especially if an interim dividend accompanies them.

Happy hunting

According to the NSE The current market sell off is being sparked by foreigners because of the poor outlook of the US economy... I completely ignored the role of foreigners in our market but now i want to thank them for the opportunity to get bargains

According to my charts. The market needs to shed some 100 points or so to find its next support .at arround 4400 points. But i believe bargain hunters like @guru and etal will support it .
Indeed US economy doesnt look gud add the Chinesse real estate bubble and you have nervous investors all over the world .

ACTIVITY 11:
A} PURCHASE OF 10,000 KCB SHARES AT AVERAGE PRICE OF KSH 18.75
B} TAKING UP OF 111 STANCHART RIGHTS AT OFFER PRICE OF KSH 165.45

COST OF ACTIVITY 11:
A} COST OF 10,000 KCB SHARES = KSH 187,500
Add 2% transaction costs = KSH 3,750
Total cost of Transaction = KSH 191,250
B} COST OF TAKING UP 111 SCBK RIGHTS =KSH 18,365

TOTAL COST OF ACTIVITY 11: KSH 209,615

CASH IN HAND AFTER ACTIVITY 10: KSH 462,890

CASH IN HAND AFTER ACTIVITY 11: KSH 253,275

SUMMARY AFTER ACTIVITY 11:
SHARES: 10,000 KCB SHARES
2,111 STANCHART SHARES
CASH IN HAND: KSH 253,275

RATIONALE OF ACTIVITY 11:
A)STANCHART:The company will soon be announcing the Q3 results accompanied with an interim dividend. I remain bullish on this share.
SCBK (and BAT(K)) are scheduled for some capital gains and interim dividend payments after the Q3 release of results next month.
B)KCB: At current share price, i find KCB hard to ignore. Currently trading at a trailing P/E of 12.3. The forward EPS for 2010 (I estimate it at Ksh 2 per share)should almost approximate the 2009 EPS of KSH 2.05 despite the additional issued and paid up shares.
(Estimated Net profit for 2010:Ksh 5.9B)
A generous dividend payment of 50-60% of profit is anticipated (KCB rights ensured company has a health capital hence reducing need to withhold too much of profit).
In Feruary-March 2011, when the 2010 results are released (and most of the shares have been mopped up by institutional investors), the KCB share should be trading at a trailing P/E of at least 13 (hence a target price of at least Ksh 26).
I will be strengthening my position in KCB on price dips (below Ksh 19)
(A more detailed analysis of KCB to follow).

Happy hunting.

I also feel that institutional investors will be taking their positions on KCB soon.

@stocksmaster to you on KCB... I also found it extremely hard to ignore...

You've also boosted my confidence in my huge buy at 18.9 bob average....

I'm patiently waiting for its imminent rise.

@stckmaster,pretty good analysis there. what is ur take on equity?