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CIC Rights Issue
Rank: Member Joined: 9/12/2009 Posts: 312
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hisah wrote:@Boris - I'm still amazed that 9/- was sliced from the 6/- breakout and the rally almost went to 13?! I was expecting a sizable correction back to 8.50-9 level after that furious rally topped out. Seems the correction has settled at 9.50-10 zone. At this price bonus dilution will see prices settle around 7.50-8 zone. But bulls might try to head back to 10 post bonus dilution. Support is still 6/- zone. @ Hisah, What would be the fair price for CIC after bonus have been loaded?
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Rank: Member Joined: 1/13/2014 Posts: 398 Location: Denmark
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I have never traded a stock immediately after book closure for bonus. I need someone to tell me if I traded my shares on 1st August (books closure is on 31st July) do I have any guarantee that my bonus will reflect once cdsc posts them out to shareholders.. If not I definitely have the right to complain, right? Seeing is believing
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Rank: Chief Joined: 8/4/2010 Posts: 8,977
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Wondergirl wrote:hisah wrote:@Boris - I'm still amazed that 9/- was sliced from the 6/- breakout and the rally almost went to 13?! I was expecting a sizable correction back to 8.50-9 level after that furious rally topped out. Seems the correction has settled at 9.50-10 zone. At this price bonus dilution will see prices settle around 7.50-8 zone. But bulls might try to head back to 10 post bonus dilution. Support is still 6/- zone. @ Hisah, What would be the fair price for CIC after bonus have been loaded? With or without bonus loaded its trading at an expensive PER (P/E) of 16.34. Actually its the most expensive of all the insurance counters with britam being the 2nd most and least expensive being Kenya RE.
CIC post bonus may settle 8/- range. But fair value is around 6/- where strong support coincidentally lies.
As it currently appears on a historical PER basis.
CIC - 16.34
BRIT - 15.00
JUB - 10.71
PAFR - 9.81
CFCI - 8.33
KNRE - 4.38
The historical PER average of the 6 is at a steep 10.76 for the insurance sector.
On forward PER basis, CIC, BRIT and JUB need to beat the street significantly to deflate the high PER and sustain their high prices. Also note with a sluggish econ (like 2014) profits get squeezed. A number of insurance firms are invested in NSE20 which has been sideways (slightly negative) for 9 months since Nov 2013. Their equities income will be flat or negative depending on what is in their portfolios.
P/B values also paint CIC and PAFR as expensive with values above 2.00 and forward P/B still likely to remain above 2.00 in 2014.
For a long term perspective KE insurance still has legs to expand considering the likes of SA and Namibia have an insurance penetration of 14.6% and 8% respectively. KE insurance penetration is a measly 3%.
So if hunting for value Kenya RE and CFCI are in the discount corner. The rest are fully priced for the year IMO.
$15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
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Rank: Chief Joined: 8/4/2010 Posts: 8,977
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jawgey wrote:I have never traded a stock immediately after book closure for bonus. I need someone to tell me if I traded my shares on 1st August (books closure is on 31st July) do I have any guarantee that my bonus will reflect once cdsc posts them out to shareholders.. If not I definitely have the right to complain, right? As long as you were still holding them on dday. Selling after dday won't make you miss out on getting your bonus loot  $15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
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Rank: Member Joined: 5/9/2014 Posts: 130 Location: Nairobi
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Thanks @hisah for the clarification and I like the comment 'bonus loot'
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Rank: Member Joined: 4/24/2014 Posts: 159 Location: Nairobi
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hisah wrote:jawgey wrote:I have never traded a stock immediately after book closure for bonus. I need someone to tell me if I traded my shares on 1st August (books closure is on 31st July) do I have any guarantee that my bonus will reflect once cdsc posts them out to shareholders.. If not I definitely have the right to complain, right? As long as you were still holding them on dday. Selling after dday won't make you miss out on getting your bonus loot So to sell immediately after booksclosure is advicable yes?  Money comes and goes. When you have it enjoy it.
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Rank: Member Joined: 1/2/2008 Posts: 268 Location: Nairobi
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Tall Order wrote:Thanks @hisah for the clarification and I like the comment 'bonus loot' Is bonus a loot?
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Rank: Chief Joined: 8/4/2010 Posts: 8,977
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wannaberich wrote:hisah wrote:jawgey wrote:I have never traded a stock immediately after book closure for bonus. I need someone to tell me if I traded my shares on 1st August (books closure is on 31st July) do I have any guarantee that my bonus will reflect once cdsc posts them out to shareholders.. If not I definitely have the right to complain, right? As long as you were still holding them on dday. Selling after dday won't make you miss out on getting your bonus loot So to sell immediately after booksclosure is advicable yes? That depends on your goals. If for speculation and you got in at a lower entry you can cash out to grab your gains.$15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
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Rank: Member Joined: 5/12/2009 Posts: 266
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@all
whats the best stock to buy now(less than 20bob) and lets say hold for sometime..
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Rank: Member Joined: 9/12/2009 Posts: 312
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hisah wrote:Wondergirl wrote:hisah wrote:@Boris - I'm still amazed that 9/- was sliced from the 6/- breakout and the rally almost went to 13?! I was expecting a sizable correction back to 8.50-9 level after that furious rally topped out. Seems the correction has settled at 9.50-10 zone. At this price bonus dilution will see prices settle around 7.50-8 zone. But bulls might try to head back to 10 post bonus dilution. Support is still 6/- zone. @ Hisah, What would be the fair price for CIC after bonus have been loaded? With or without bonus loaded its trading at an expensive PER (P/E) of 16.34. Actually its the most expensive of all the insurance counters with britam being the 2nd most and least expensive being Kenya RE.
CIC post bonus may settle 8/- range. But fair value is around 6/- where strong support coincidentally lies.
As it currently appears on a historical PER basis.
CIC - 16.34
BRIT - 15.00
JUB - 10.71
PAFR - 9.81
CFCI - 8.33
KNRE - 4.38
The historical PER average of the 6 is at a steep 10.76 for the insurance sector.
On forward PER basis, CIC, BRIT and JUB need to beat the street significantly to deflate the high PER and sustain their high prices. Also note with a sluggish econ (like 2014) profits get squeezed. A number of insurance firms are invested in NSE20 which has been sideways (slightly negative) for 9 months since Nov 2013. Their equities income will be flat or negative depending on what is in their portfolios.
P/B values also paint CIC and PAFR as expensive with values above 2.00 and forward P/B still likely to remain above 2.00 in 2014.
For a long term perspective KE insurance still has legs to expand considering the likes of SA and Namibia have an insurance penetration of 14.6% and 8% respectively. KE insurance penetration is a measly 3%.
So if hunting for value Kenya RE and CFCI are in the discount corner. The rest are fully priced for the year IMO.
Wow!@Hisah, Thats some answer, when i grow up in stocks, I want be @Hisah. One last lesson for the day: How do they determine the price @ which they load the bonus?
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