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Kenya airways Right Issue
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StatMeister
#71 Posted : Wednesday, March 14, 2012 8:25:59 PM
Rank: Veteran

Joined: 5/23/2010
Posts: 868
Location: La Islas Galápagos
mwekez@ji wrote:
About 80 per cent of Kenya Airways Sh20.7billion share rights issue has been secured, KQ management said

This is reinforced by the fact that local and foreign institutions own 77.14% of KQ shares while local individuals own 22.14%. Foreign individuals own a mere 0.71%.

There you have it, only wanjiku is yet to decide whether to exercise their rights


What happens to KQ, in terms of return on equity does not depend on who owns the shares
A bad day fishing is better than a good day at work
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mwekez@ji
#72 Posted : Wednesday, March 14, 2012 11:05:43 PM
Rank: Chief

Joined: 5/31/2011
Posts: 5,121
StatMeister wrote:

What happens to KQ, in terms of return on equity does not depend on who owns the shares


lemmi highlight some benefits of the shareholding that directly impact on profitability:

KLM brings onboard a wealth of ideas and network

Government shareholding stamps the authority that they are a national carrier and they will get the required gvt support (we know what happens when government support is missing, case study: Precision Air, Tz)

Qualified investors have the financial muscle to contribute the much needed capital for expansion and growth

.............................................
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mwekez@ji
#73 Posted : Wednesday, March 14, 2012 11:10:39 PM
Rank: Chief

Joined: 5/31/2011
Posts: 5,121
Cde Monomotapa wrote:
mwekez@ji wrote:
Cde Monomotapa wrote:
mwekez@ji wrote:
Citi Bank to underwrite the offer

Interesting. Shrewd way of securing a client for the longrun ;-)


Indeed shrewd

... and wanjiku should derive some comfort from the underwriting

True but this only means KCB might not hold as much cash for the period as I'd thought Sad too many Qualified Investors up in hurr!


ROOOOOOAAAAAAAAARRRRRR, YOU, EBL, BBK and I&M have offered to provide loans to those shareholders willing to take up their rights
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mwekez@ji
#74 Posted : Wednesday, March 14, 2012 11:25:10 PM
Rank: Chief

Joined: 5/31/2011
Posts: 5,121
chaimani wrote:
...wait in june the price might be 6 bob or below due to dilution


Shame on you Shame on you Shame on you

Do you know what is dilution?

Dilution cannot lead to the price falling below KES 15.10

This is how you calculate the "diluted share price":

Price just before the rights issue news; 18.6 (and it could have absorbed some of rights news because the share fell from 50+ partly because of the rights issue expectations)


{(16*14)+(5*18.6)}/(16+5) = 15.10
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mlennyma
#75 Posted : Wednesday, March 14, 2012 11:43:31 PM
Rank: Elder

Joined: 7/21/2010
Posts: 6,194
Location: nairobi
@mwekezaji this market does not listen to mathematics,this thing will crash below 14
"Don't let the fear of losing be greater than the excitement of winning."
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mwekez@ji
#76 Posted : Wednesday, March 14, 2012 11:56:38 PM
Rank: Chief

Joined: 5/31/2011
Posts: 5,121
mlennyma wrote:
@mwekezaji this market does not listen to mathematics,this thing will crash below 14


If that happens, then it will not be due to dilution!!!
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mwekez@ji
#77 Posted : Thursday, March 15, 2012 12:00:05 AM
Rank: Chief

Joined: 5/31/2011
Posts: 5,121
mlennyma wrote:
@mwekezaji this market does not listen to mathematics,this thing will crash below 14


If that crash happens, then it will not be due to dilution!!!
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guru267
#78 Posted : Thursday, March 15, 2012 7:53:13 AM
Rank: Elder

Joined: 1/21/2010
Posts: 6,675
Location: Nairobi
mwekez@ji wrote:
mlennyma wrote:
@mwekezaji this market does not listen to mathematics,this thing will crash below 14


If that happens, then it will not be due to dilution!!!


The EPS will fall from 8bob to 1.25 because of dilution
The DPS will fall from 1.5 to 30cents because of dilution

In the current market guys will be willing to pay at most 9bob for such a share...

So when it does fall below 14 it WILL be because of dilution

Mark 12:29
Deuteronomy 4:16
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Aguytrying
#79 Posted : Thursday, March 15, 2012 8:21:19 AM
Rank: Elder

Joined: 7/11/2010
Posts: 5,040
guru267 wrote:
mwekez@ji wrote:
mlennyma wrote:
@mwekezaji this market does not listen to mathematics,this thing will crash below 14


If that happens, then it will not be due to dilution!!!


The EPS will fall from 8bob to 1.25 because of dilution
The DPS will fall from 1.5 to 30cents because of dilution

In the current market guys will be willing to pay at most 9bob for such a share...

So when it does fall below 14 it WILL be because of dilution


technically the actual dilution will occur when the new 1.47 billion shares hit the market. Guru i agree with your share price prediction, God forbid it trades at pe of below 7.5 to 6!
The investor's chief problem - and even his worst enemy - is likely to be himself
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mwekez@ji
#80 Posted : Thursday, March 15, 2012 9:00:11 AM
Rank: Chief

Joined: 5/31/2011
Posts: 5,121
guru267 wrote:
mwekez@ji wrote:
mlennyma wrote:
@mwekezaji this market does not listen to mathematics,this thing will crash below 14


If that happens, then it will not be due to dilution!!!


The EPS will fall from 8bob to 1.25 because of dilution
The DPS will fall from 1.5 to 30cents because of dilution

In the current market guys will be willing to pay at most 9bob for such a share...

So when it does fall below 14 it WILL be because of dilution



@Guru, any fall in price to less than 15.10 will not be due to dilution, but other factors

If you insist it will be due to dilution, lets crunch the numbers, you have mine in post 74. Lemmi have yours showing a diluted share price of <14!
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