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Rank: Veteran Joined: 6/17/2009 Posts: 1,619
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Factoring in the bonus share?
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Rank: Elder Joined: 1/21/2010 Posts: 6,675 Location: Nairobi
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VituVingiSana wrote:For a measly dividend, that is a huge drop! my broker warned me this might also happen to KPLC but it doesnt make any sense.. the dividend was 3bob which is a less than MEDIOCRE 1.6% yield... but these things are bound to happen thats why its always advised to investors to buy a stock ex div if you have a year or more ambitions for it.... if it was because of the dividend then i dont expect any further fall in NIC's share price... but we'll have to wait for monday... watch this space!!! Mark 12:29
Deuteronomy 4:16
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Rank: Chief Joined: 1/3/2007 Posts: 18,120 Location: Nairobi
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@guru In that case, I am saving up cash to buy KPLC ex-div Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Veteran Joined: 2/10/2010 Posts: 1,001 Location: River Road
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cnn wrote:Factoring in the bonus share? When you factor in the bonus the drop is not significant. At 34.5 am going back to NIC
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Rank: Elder Joined: 12/9/2009 Posts: 6,592 Location: Nairobi
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mkonomtupu wrote:When you factor in the bonus the drop is not significant. At 34.5 am going back to NIC Which bonus are you guys talking about? The last I remember was a Rights Issue at 70/-
BBI will solve it :)
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Rank: Veteran Joined: 2/10/2010 Posts: 1,001 Location: River Road
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2012, u never got the sms from +2372 NIC announced a bonus of 1 share for every 10 held, posting and crediting is 12 May 2010 plus the dividends
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Rank: Elder Joined: 1/21/2010 Posts: 6,675 Location: Nairobi
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@mkonomtupu and @cnn NBK also had a bonus share issue of 2:5 but the share rose immediately it was announced... markets dont factor in information three weeks after the information is announced.. usually its factored of the announcement or just before the announcement by the few insiders or analysts.. so i dont think its fair to say tofays price movement was as a result of an announcement 3 weeks ago,. Mark 12:29
Deuteronomy 4:16
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Rank: Veteran Joined: 2/10/2010 Posts: 1,001 Location: River Road
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Guru, this stock was at 31/- in January then went to 38 before the announcement of the results before sliding back to 34-35/-(Feb laxity). It went up and peaked at 39/-this week. The demand was mainly due to the bonus share, the demand has gone now that the books closed on 25th March 2010.
I expect the same pattern for NBK
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Rank: Veteran Joined: 6/17/2009 Posts: 1,619
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@guru,when does NBK close its books? Come back here and present your argument then.A share trading ex-bonus means there are more of the same now available though practically that happens on the day they are uploaded to the CDSC accounts The effect is a dilution of the existing shares,and the market MAY adjust to reflect that.
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Rank: Elder Joined: 1/21/2010 Posts: 6,675 Location: Nairobi
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mkonomtupu wrote:Guru, this stock was at 31/- in January then went to 38 before the announcement of the results before sliding back to 34-35/-(Feb laxity). It went up and peaked at 39/-this week. The demand was mainly due to the bonus share, the demand has gone now that the books closed on 25th March 2010.
I expect the same pattern for NBK @mkonomtupu i'm in total agreement with you.. it was just a case of misunderstanding on my part... when you and @cnn said the market was factoring in the bonus shares i thought you meant the stock was being sold as a result of bonus shares being issued to shareholders which didnt make any sense... but now that i know what you meant... it does make sense that the stock would sell off and i also expect NBK to follow suit when their books close... Mark 12:29
Deuteronomy 4:16
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Rank: Elder Joined: 2/26/2008 Posts: 4,449
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@sparkly, v true. strong +ve undercurrents...
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Rank: Chief Joined: 1/3/2007 Posts: 18,120 Location: Nairobi
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If NIC is ex-bonus then the price drop is OK... coz 10% bonus shud equal to a 10% drop in price ex-bonus... Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Elder Joined: 5/27/2008 Posts: 3,760
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This NIC is quite interesting. Assume you had 1,000 before announcement. Had you sold cum, you would have had ksh 39,000 (ignore transactions costs).
Had you hanged on you would have had a dividend of ksh 237.50 (.25*1,000*.95) and a bonus of 100 shares for a total value of ksh 38,188 using the ex-cd ex-b price of ksh 34.50
By selling cum, you would have been ahead by nearly ksh 800.
If you are attached to the stock you would have bought 1,130 shares with your ksh 39,000 - better of by 30 shares.
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Rank: Elder Joined: 9/23/2009 Posts: 8,083 Location: Enk are Nyirobi
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@GG Nic is one very volatile stock. Traders can make very good money just by playing on market psychology. A while back it fell from 39 to 29 in a very short time, for no particular reason. Life is short. Live passionately.
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Rank: Veteran Joined: 2/10/2010 Posts: 1,001 Location: River Road
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guru267 wrote:VituVingiSana wrote:For a measly dividend, that is a huge drop! my broker warned me this might also happen to KPLC but it doesnt make any sense.. the dividend was 3bob which is a less than MEDIOCRE 1.6% yield... but these things are bound to happen thats why its always advised to investors to buy a stock ex div if you have a year or more ambitions for it.... if it was because of the dividend then i dont expect any further fall in NIC's share price... but we'll have to wait for monday... watch this space!!! Guru, KPLC books were closing on 29-3-2010 or am i wrong. I was also expecting the price to fall but the price seems to hold.
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Rank: Elder Joined: 9/25/2009 Posts: 4,534 Location: Windhoek/Nairobbery
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this nic free fall is overdone...this is panic selling at its best...
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Rank: Elder Joined: 1/21/2010 Posts: 6,675 Location: Nairobi
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@mkonomtupu you are right the books closed yesterday and i actually won the bet with my broker because he argued that the price rise was due to investors chasing the interim dividend so its price would fall ex div whereas my arguement was that investors were chasing both interim and final dividend(so they cant sell now) and the others were reacting positively to the share restructuring.. this share price has plenty of support at current levels IMHO... judging from the other counters and research they MAY also offer bonus shares at year end to make the rights issue attractive... Mark 12:29
Deuteronomy 4:16
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Rank: Member Joined: 9/22/2008 Posts: 79
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i thought equity would trade below 15.50 ex-dividend.it is amazing how it is clustering around 15.50-15.80 ex-dividend.What could be the reason
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Rank: Elder Joined: 1/21/2010 Posts: 6,675 Location: Nairobi
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@mwala not all counters fall ex div especially equity bank this year... if you are planning to buy into it please do so soon because the market is starting to factor in huge growth in 2010 half year results into the share price... Mark 12:29
Deuteronomy 4:16
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Rank: Chief Joined: 3/24/2010 Posts: 6,779 Location: Black Africa
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Mwala, I think equity is doing 15.65-15.85 (closed Tuesday 15.75) because investors have great faith in the stock. It only went down last week because people sold after the books closed. James Mwangi (The Legend!) said he expects Southern Sudan and Uganda to break even soon. I would keep my one on the counter if I were you. Once the 1st quarter results are in, it will shoot up. GOD BLESS YOUR LIFE
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