What is the subscription rate of the KCB rights issue ?

They will be announcing tomorrow. Unofficially, I have heard that they had a figure of about Kshs 12 billion by mid last week. However, processing was incomplete, so it it should be higher than that!

Now, that's funny.

Even if the subscription rate is 50% it should be sufficient to raise tier 2 capital ratios, but they’ll be pressured to raise core capital again by about 2013. It should be more interesting to see how the bank will the bank function if the issue is undersubscribed. Well they continue to invest in low risk assets like govt securities which will grow deposits faster. As KRA’s tax collector, what happens when they collect tax receipts in July will that push deposits higher. You just have to look at the growth in the loan book and contingent liabilities in H1 up 10 billion each and a 28 billion rise in deposits. Isn’t this what is straining the capital base (as well as the poor asset returns). The problem at this point are the risk weighted assets (with 100% weighting) especially the contingent liabilities. Letters of credit, guarantees and acceptances went up from 33 billion to 43 billion in H1 and while other contingent liabilities are up 12 billion to 31 billion. Why are letters of credit (etc) growing so fast considering they carry the same credit risk as ordinary loans and why aren’t they generating high enough fees? Is KCB accommodating too many people who are in the import/export businesses? KCB management might tell us that gross NPLs grew marginally while Net NPLs declined in H1 but is the management taking unnecessary risk? Raising portfolio risk without assessing the risk return decision and thus hindering their ability to comply with the regulatory requirements? One needs to start scrutinizing those off balance sheet items.

Better than i expected. Clearly there are many moneyed suckers outthere

Hi, I guess you can call me one of the suckers. I applied for quite a heap of additional shares and with this kind of uptake I am eyeing no less than Kshs 23 by February next year. I will be happy with approximately 35% return on my capital for slightly over 6 months. I cannot honestly see how KCB will continue trading at a forward PE of 8-9 when the likes of Barclays are trading at one of 15.

It seems my logic worked . Lol . Thats nt a bad rate. @ vvs . Ar u still waiting for a 50 - 60 % subscription rate ? Too much pessimism is harmful to your portfolio. Ehehe

I quite agree with you. KCB will easily return to trade in the mid to upper 20s.

For the shares to appreciate, demand for them must be created. My take is that any investor who wanted to position himself is already in there except for those who might have kept off due to referendum fears. Long haul investors keep on holding.

Share price is now down to 18.10 bob...when are they uploading the new shares...i wanna get my cheaque book ready...