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A concern on KCB Rights Issue
Rank: Elder Joined: 12/9/2009 Posts: 6,592 Location: Nairobi
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What happens if the share price falls below the rights' offer price within the issue period?
BBI will solve it :)
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Rank: Elder Joined: 9/25/2009 Posts: 4,534 Location: Windhoek/Nairobbery
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Evolve wrote:@the deal, If KCB trades below the rights offer price, then you can let the rights lapse and purchase the shares from the market as long as the price level covers the transaction costs. If this happens, you can bet the issue will have no takers and it will be a waterloo for KCB.
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Rank: Elder Joined: 1/21/2010 Posts: 6,675 Location: Nairobi
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this stock is a screaming sell because there is no possibility of captital gains for the next two years... though i'm confident even with the dilution they will still pay a 1bob dividend and at current prices this represents a good dividend yield to wait it out Mark 12:29
Deuteronomy 4:16
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Rank: Chief Joined: 1/3/2007 Posts: 18,135 Location: Nairobi
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2012 wrote:What happens if the share price falls below the rights' offer price within the issue period? It happened for EABL many years ago... so the 'underwriter' (not really but Diageo backstopped it) bought all the unallocated shares... and NEVER looked back... What Diageo bought (I think it was at 52/-) is now 20x... coz of bonuses, splits... I am NOT saying u buy the Rights but do what @the deal suggests... if u like KCB Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Elder Joined: 12/9/2009 Posts: 6,592 Location: Nairobi
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I hear you all, but I guess what I'm asking indirectly is; isn't this equivalent to a vote of no confidence in the management of KCB? What will this mean for KCB if they don't manage to get the 15B?
BBI will solve it :)
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Rank: Veteran Joined: 1/7/2010 Posts: 1,279 Location: nbi
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2012-apologies in advance for your hurt feelings, but if you are a current KCB shareholder and you are asking what does it mean if shareholders refuse the rights, I guess you shouldn't have bought the KCB shares (or any other shares for the matter). The Governor of Nyeri - 2017
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Rank: Elder Joined: 7/22/2009 Posts: 7,467
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KCB might hit 17/= by friday 25th June. If that happens, then this rights issue is doomed. Another major thing that will happen at that point is that investor confidence on this share will go to it's lowest ebb in a long long time. And the share price will plummet even further!!! This is a blood bath!!! @ vvs et-al - Buying when there is blood on the streets always promises a handsome return. How much blood should we let flow before we get in?? I should get some of these shares for my daughter - she's a long term investor (although she doesn't know it yet - LOL)! Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good returns.
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Rank: Veteran Joined: 5/24/2010 Posts: 846 Location: KENYA
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Sold mine very quickly. I am not that confident in KCB's management anymore. There are many other better picks in the market right now. @GURU, You have good reasons for waiting it out, you a truly an investor who sticks to his strategy. Others would do well to follow your ideals.
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Rank: Elder Joined: 7/23/2008 Posts: 3,017
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I was trying to be a smart alec, wait for my rights to accrue then exit today, but with the current price, i don't know if I made the right decision. This share has singly screwed all my portfolio gains. I should have ...... "The purpose of bureaucracy is to compensate for incompetence and lack of discipline." James Collins
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Rank: Chief Joined: 1/3/2007 Posts: 18,135 Location: Nairobi
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MaichBlack wrote:
@ vvs et-al - Buying when there is blood on the streets always promises a handsome return. How much blood should we let flow before we get in?? I should get some of these shares for my daughter - she's a long term investor (although she doesn't know it yet - LOL)!
Your daughter should be PROUD of you! Anyway, IMHO... if the price falls significantly below 17/-... then buy them up coz I think they will edge back up... I have my own theory on this! So give up the Rights (I have decided not to exercise my Rights) but buy from the market if they fall at 16.50 (cover commission costs)... Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Elder Joined: 7/26/2007 Posts: 6,514
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kcb can never be compared to eabl, thats like comparing chuma with gold. for me, kcb is a serious SELL! The last kcb rights was at 25....the price never recovered to that level, leave aside all the mathematics and theories. This one is at 17 hahahahhaha I see kcb at 12 tops. Business opportunities are like buses,there's always another one coming
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Rank: Elder Joined: 9/15/2006 Posts: 3,905
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If share price goes below rights issue price before the offer commences, the offer will fail. I don't see the point of a pension fund buying 2 million at 17/= if they can get the same at 16.50/=.
But from initial 2.5b in 2004, 5.5b in 2008 to 15b in 2010 - the brat is getting greedier more frequently (1/2 the duration) and requesting much more food (x3 times the amount).
I'm a shareholder and I'm very afraid (wooahahahah!)
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Rank: Member Joined: 2/20/2007 Posts: 359
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Obi 1 Kanobi wrote:I was trying to be a smart alec, wait for my rights to accrue then exit today, but with the current price, i don't know if I made the right decision.
This share has singly screwed all my portfolio gains. I should have ...... @rObi-ng 1 Kanobi Exactly my sentiments! 40% of portfolio..lost nearly 30%..I should have exited at 32 ages ago but was in it for the long-term..and didn't quite expect the market to react with disdain post-last rights..Expect more contempt for this share post rights again... KCB management has little regard for shareholder interests, I think. Some of my less profitable minions have made me far better returns!
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Rank: User Joined: 5/9/2010 Posts: 1,418 Location: Nai
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I think shareholers are tired of these rights issues. And it shld now be public informatiön that these rights issue WILL FAIL. Lets see who'll come to mop up the excess shares. Your future depends on your dreams so go to sleep !
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Rank: Elder Joined: 9/25/2009 Posts: 4,534 Location: Windhoek/Nairobbery
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Hehehe best bid today on the normal board was 15 bob...so KCB has taken the button over from KQ...i expect CMC to join the race...for the Most falling counters of the year...
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Rank: Elder Joined: 6/20/2007 Posts: 2,037 Location: Lagos, Nigeria
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It is a matter of choice, for those of us that started to buy KCB shares since 2004, I was looking forward to a highly discounted price not 17 bob. I believe there are other opportunities in NSE ie either Other good counters OR Much cheaper KCB post rights (14 bob) which ever comes first will suffice. The wazua spirit as members is to educate and inform and learn from others within the limit of what we know in any chosen area irrespective of our differences in tribes, nationalities, etc. .
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Rank: Veteran Joined: 6/2/2010 Posts: 1,070
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I just hope that KCB management are paying attention to these sentiments because another rights issue WILL NOT/SHOULD NOT be an option for a long long time. Though I have KCB shares, part of me hopes that this rights issue is a flop so that they wake up and smell the coffee......
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Rank: Elder Joined: 9/25/2009 Posts: 4,534 Location: Windhoek/Nairobbery
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The MD should go on an investor hunt like Michael Joseph of safaricom...LoL.
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Rank: Elder Joined: 9/15/2006 Posts: 3,905
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@My 2 cents, I'm with you on this one - the petulance of it all!
-Just like that, the biggest rights issue in Kenya's history
-Can you imagine, then they just decide no underwriter.
-Then when CMA tell them they are diluting us toooo much, they maintain same target and just change offer price.
All this with a cost/income ratio of 71%, lowest in the industry - NKT
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Rank: Member Joined: 1/9/2008 Posts: 537
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muganda wrote:@My 2 cents, I'm with you on this one - the petulance of it all!
-Just like that, the biggest rights issue in Kenya's history
-Can you imagine, then they just decide no underwriter.
-Then when CMA tell them they are diluting us toooo much, they maintain same target and just change offer price.
All this with a cost/income ratio of 71%, lowest in the industry - NKT
very gud points...to add on to that they didnt do anything of note with the last 5bn we gave them 2 yrs ago..lol..im soo happy i sold my kcb shares
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