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Rank: Chief Joined: 1/3/2007 Posts: 18,124 Location: Nairobi
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@proverB - Who says they are looking at 'trading' these shares immediately? Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Veteran Joined: 3/12/2010 Posts: 1,199 Location: Eastlander
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VituVingiSana wrote:@proverB - Who says they are looking at 'trading' these shares immediately? aaaaahhhmmm.. Assuming they are all investors..fundamentally valued KCB shares and now decided to buy..at which point, question is when to buy and at what price to buy. why not wait out the probable correction as new shares come in, or just buy the ex-rights share...rather than ... attach some uncertainty by paying for a share now at kshs 1 premium of which share you will not have until the month is over? I do, however, see the wisdom of paying Kshs 1 now and you have a month to hustle for the 17.00 ..or even even with the 17 now..you could do something else with it for a month..but i doubt most buying have that thinking.. ..Let your light so shine before men, that they may see your good works, and glorify your Father which is in heaven...Matt5:16
- 1769 Oxford King James Bible 'Authorized Version
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Rank: Chief Joined: 1/3/2007 Posts: 18,124 Location: Nairobi
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@proverB - 1/- is the payment for a CALL OPTION... Basically, very simple... pay 1/- now but exercise later... I would do the same if I were interested in KCB... There is the cost as well... 18.65 + commissions = 19/- which means you 'spend' 19/- today so there is an interest cost for the 'additional' 18/- for 2 months... Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Veteran Joined: 3/12/2010 Posts: 1,199 Location: Eastlander
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VituVingiSana wrote:@proverB - 1/- is the payment for a CALL OPTION...
Basically, very simple... pay 1/- now but exercise later... I would do the same if I were interested in KCB...
There is the cost as well... 18.65 + commissions = 19/- which means you 'spend' 19/- today so there is an interest cost for the 'additional' 18/- for 2 months... Interesting.. now am thinking.  Thanx. ..Let your light so shine before men, that they may see your good works, and glorify your Father which is in heaven...Matt5:16
- 1769 Oxford King James Bible 'Authorized Version
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Rank: Elder Joined: 2/16/2007 Posts: 2,114
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Who gets the 1/-,KCB or the shareholder offering their rights?
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Rank: Elder Joined: 1/21/2010 Posts: 6,675 Location: Nairobi
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Chaka wrote:Who gets the 1/-,KCB or the shareholder offering their rights? the shareholder gets the 1bob and KCB gets the 17bob Mark 12:29
Deuteronomy 4:16
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Rank: Veteran Joined: 3/12/2010 Posts: 1,199 Location: Eastlander
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..@ VVS Check Mail.. ..@ Guru please blank mail.. homead.ke@gmail.com..Let your light so shine before men, that they may see your good works, and glorify your Father which is in heaven...Matt5:16
- 1769 Oxford King James Bible 'Authorized Version
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Rank: Elder Joined: 1/21/2010 Posts: 6,675 Location: Nairobi
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ProverB wrote:why not wait out the probable correction as new shares come in, or just buy the ex-rights share...rather than
... attach some uncertainty by paying for a share now at kshs 1 premium of which share you will not have until the month is over?
I do, however, see the wisdom of paying Kshs 1 now and you have a month to hustle for the 17.00 ..or even even with the 17 now..you could do something else with it for a month..but i doubt most buying have that thinking.. @ProverB these shares are trading at a fair price and i would buy the rights at their current value... i'm assuming KCB will have a forward EPS of 1.5 ex rights which gives a forward P/E of 11.6 which is not expensive by all means especially for long term investors... And KCB will pay out a dividend of 1bob which is a 5.55% yield so why not buy now???? Mark 12:29
Deuteronomy 4:16
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Rank: Elder Joined: 9/25/2009 Posts: 4,534 Location: Windhoek/Nairobbery
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If @Proverb is bullish on Kcb and decides to buy 100 rights Kcb shares from @VVS...he pays him the 1 bob premium to have the rights to the shares,if the price rises above the current strike price(Ksh 17.00) i.e 19 bob then @Proverb can exercise his rights and bank in the Ksh 2 as profits and @ Vvs losses out...but if the price goes down...@Proverb losses out...
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Rank: Veteran Joined: 3/12/2010 Posts: 1,199 Location: Eastlander
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the deal wrote:If @Proverb is bullish on Kcb and decides to buy 100 rights Kcb shares from @VVS...he pays him the 1 bob premium to have the rights to the shares,if the price rises above the current strike price(Ksh 17.00) i.e 19 bob then @Proverb can exercise his rights and bank in the Ksh 2 as profits and @ Vvs losses out...but if the price goes down...@Proverb losses out... Thus my wondering..why are people bullish on the kcb? especially considering..new listings will affect trade volumes of the share..and demand of the share will not necessarily act in tandem with the new supply..rising probability the for anyone investing..even long term..the probability of price going lower than current level is more legitimate.. why not wait? ..Let your light so shine before men, that they may see your good works, and glorify your Father which is in heaven...Matt5:16
- 1769 Oxford King James Bible 'Authorized Version
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Rank: Elder Joined: 2/10/2007 Posts: 1,587
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@Proverb
Like someone pointed out earlier, the decision to buy KCB depends on one's investment horizon - long-term or short-term. Once you have decided on the value of the share, you go a head and buy. What you cannot tell for sure is whether the price will come down after rights shares are posted to the accounts. I would put a fair value of KCB ex-rights at KES 25, so I will want to pick the rights at 1 (18 in total) without winking!
If you are for speculation, wait.
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Rank: Veteran Joined: 3/12/2010 Posts: 1,199 Location: Eastlander
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@pKoli.. True. In assessing one's own risk..it's a fact you cannot erase whole risk..but you can minimise on it. My point is..reduce risk by minimising on unknown variables.. Fact is share supply will increas in market..fact is ..we cannot assume that demand will mop up the extra liquidity...neither can we say it will not..why not get rid of this market risk that totally has nothing to do with the company's fundamentals..and wait out..just a month before taking action?..atleast that is what i'd do.. Anyway..just thinking. ..Let your light so shine before men, that they may see your good works, and glorify your Father which is in heaven...Matt5:16
- 1769 Oxford King James Bible 'Authorized Version
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Rank: Elder Joined: 2/10/2007 Posts: 1,587
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@Proverb,
I honestly think that actual risk lies in the fundamentals of the company, not the share supply in the market. Else safcom would be trading at 1 bob. It has been fairly priced at a pe of around 15.
I see your reasoning and my strategy will 3 quarters invest currently and a quarter wait for the supply.
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Rank: Elder Joined: 1/21/2010 Posts: 6,675 Location: Nairobi
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PKoli wrote:@Proverb,
I honestly think that actual risk lies in the fundamentals of the company, not the share supply in the market. Else safcom would be trading at 1 bob. It has been fairly priced at a pe of around 15. very good observation... increase in supply wont change the companies fundamentals significantly Mark 12:29
Deuteronomy 4:16
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Rank: Veteran Joined: 3/12/2010 Posts: 1,199 Location: Eastlander
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PKoli wrote:@Proverb,
safcom would be trading at 1 bob. It has been fairly priced at a pe of around 15.
I see your reasoning and my strategy will 3 quarters invest currently and a quarter wait for the supply. ..safaricom is not changing share supply and the market took awhile to adjust to current volumes....KCB is changing supply with over 1 billion shares....regardless of investment principles.. supply and Demand MUST influence price..hence market MUST adjust to new volumes of KCB.. I think. ..Let your light so shine before men, that they may see your good works, and glorify your Father which is in heaven...Matt5:16
- 1769 Oxford King James Bible 'Authorized Version
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Rank: Elder Joined: 1/21/2010 Posts: 6,675 Location: Nairobi
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ProverB wrote:..safaricom is not changing share supply and the market took awhile to adjust to current volumes....KCB is changing supply with over 1 billion shares....regardless of investment principles.. supply and Demand MUST influence price..hence market MUST adjust to new volumes of KCB.. I think.
first of all there are only 887million shares not over 1billion secondly with a P/E of 13.8 then how will the share fall??? because if it does fall then it will look cheap and hence attract loads of demand hence buoying the share price Mark 12:29
Deuteronomy 4:16
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Rank: Veteran Joined: 3/12/2010 Posts: 1,199 Location: Eastlander
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guru267 wrote:ProverB wrote:..safaricom is not changing share supply and the market took awhile to adjust to current volumes....KCB is changing supply with over 1 billion shares....regardless of investment principles.. supply and Demand MUST influence price..hence market MUST adjust to new volumes of KCB.. I think.
first of all there are only 887million shares not over 1billion secondly with a P/E of 13.8 then how will the share fall??? because if it does fall then it will look cheap and hence attract loads of demand hence buoying the share price Thanx for correction. I have an aversion to manipulating of volumes..especially fundamental. I will wait out on KCB.. ..Let your light so shine before men, that they may see your good works, and glorify your Father which is in heaven...Matt5:16
- 1769 Oxford King James Bible 'Authorized Version
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Rank: Elder Joined: 9/25/2009 Posts: 4,534 Location: Windhoek/Nairobbery
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@Proverb if only you had a PHD in Gambling Sociology...and a Crytal ball for Merali or you were a Makmende like @Stocksmaster then you would buy those rights...
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Rank: Veteran Joined: 3/12/2010 Posts: 1,199 Location: Eastlander
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the deal wrote:@Proverb if only you had a PHD in Gambling Sociology...and a Crytal ball for Merali or you were a Makmende like @Stocksmaster then you would buy those rights... deal..i think your comment just passed me by!  i don't get. ..Let your light so shine before men, that they may see your good works, and glorify your Father which is in heaven...Matt5:16
- 1769 Oxford King James Bible 'Authorized Version
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Rank: Elder Joined: 9/25/2009 Posts: 4,534 Location: Windhoek/Nairobbery
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ProverB wrote:the deal wrote:@Proverb if only you had a PHD in Gambling Sociology...and a Crytal ball for Merali or you were a Makmende like @Stocksmaster then you would buy those rights... deal..i think your comment just passed me by! i don't get. I mearnt to say theres too much risk if u buy the rights now...i.e referundum...
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