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kengen announcement :rights issue resolution
Rank: Elder Joined: 12/4/2009 Posts: 10,702 Location: NAIROBI
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@Othelo; After the rights issue the share price will now start its price discovery;watch out as the company reaches a mkt cap of about ksh.80bn up from the current sh.20bn Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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Rank: Chief Joined: 1/3/2007 Posts: 18,121 Location: Nairobi
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hisah wrote:@sparkly, that price upthrust during the 'very nice' FY announcement is going to leave a very bad taste I warned. Remember our discussion. Let's compare notes next October. This super dilutive rights issues will crater this counter badly. Sell while you can then buy post rights, which will be far cheaper anyway. This is KQ 2012 again. Amen. I am staying away. Plus the scams eg the 54bn contract to move rigs won by a firm whoe business credentials were suspect just a few weeks earlier. Something is rotten in the Kingdom of KenGen. I'd rather buy KPLC. There's also low PER KenRe. Or KK. Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Elder Joined: 1/21/2010 Posts: 6,675 Location: Nairobi
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After the rights issue EPS will fall to about 1 bob. If one buys at current prices and skips the rights they still won't be that badly off. Mark 12:29
Deuteronomy 4:16
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Rank: Member Joined: 6/15/2013 Posts: 301
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guru267 wrote:After the rights issue EPS will fall to about 1 bob.
If one buys at current prices and skips the rights they still won't be that badly off. Forgive me if i am wrong but current EPS ~5.4 @8/= then it falls to EPS ~1.5 @2/= and you buy at current prices and don't defend your rights wont you have lost a lot of value in your shares post rights? Anyway i hope they price their rights fairly at around 2/= because if they become greedy and price at ~4/= etc then they face a failing rights issue and count me out.
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Rank: Elder Joined: 9/23/2009 Posts: 8,083 Location: Enk are Nyirobi
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hisah wrote:@sparkly, that price upthrust during the 'very nice' FY announcement is going to leave a very bad taste I warned. Remember our discussion. Let's compare notes next October. This super dilutive rights issues will crater this counter badly. Sell while you can then buy post rights, which will be far cheaper anyway. This is KQ 2012 again. @Hisah, I am not one to sell a perfectly healthy share at a loss. I will defend/sell my rights. Life is short. Live passionately.
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Rank: Elder Joined: 9/23/2009 Posts: 8,083 Location: Enk are Nyirobi
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kawi254 wrote:The 30% private shareholders will not all be able to take up all their rights, Goverment will end up with ~80% or KenGen can take advantage of new Companies Act and buy back the shares that will not be taken up. The real reason KenGen is doing a rights is to get more borrowing headroom to maintain Debt:Equity ration of 70:30 There will be an oversubscription for untaken rights. Life is short. Live passionately.
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Rank: Elder Joined: 7/21/2010 Posts: 6,183 Location: nairobi
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Going by many examples in the nse, buying after rights will give a lower entry point going forward "Don't let the fear of losing be greater than the excitement of winning."
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Rank: Elder Joined: 9/20/2015 Posts: 2,811 Location: Mombasa
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Heed my call Wazuans! Jump out of this counter. You will be shafted more terribly ex rights than screwed in the case of HFCK... After standard ex right price the share will dip more than 50%.....You wanna be left emaciated though it will take time to start the journey north. John 5:17 But Jesus replied, “My Father is always working, and so am I.”
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Rank: Member Joined: 9/30/2013 Posts: 254
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@sparky this is getting murky,does one sell currently ,take up the rights or wait to buy post rights???
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Rank: New-farer Joined: 7/1/2015 Posts: 67
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Spikes wrote:Heed my call Wazuans! Jump out of this counter. You will be shafted more terribly ex rights than screwed in the case of HFCK... After standard ex right price the share will dip more than 50%.....You wanna be left emaciated though it will take time to start the journey north. when is the likely date of the rights issue? getting out now may cause me lose my dividends just earned! “It’s no good, it’s no good!” says the buyer—
then goes off and boasts about the purchase-Proverbs 20:14
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Rank: Elder Joined: 12/4/2009 Posts: 10,702 Location: NAIROBI
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Quarter 1 next year ndio rights issue Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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Rank: Elder Joined: 9/23/2009 Posts: 8,083 Location: Enk are Nyirobi
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mthaka wrote:@sparky this is getting murky,does one sell currently ,take up the rights or wait to buy post rights??? For those who are already in, defend your rights or sell the rights (not shares). For those who are out, wanting to get in, buy after rights issue is concluded. Life is short. Live passionately.
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Rank: Member Joined: 12/1/2007 Posts: 539 Location: Nakuru
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sparkly wrote:mthaka wrote:@sparky this is getting murky,does one sell currently ,take up the rights or wait to buy post rights??? For those who are already in, defend your rights or sell the rights (not shares). For those who are out, wanting to get in, buy after rights issue is concluded. @Sparkly forgive my ignorance, has the rights price been officially determined? And, these rights, how do you sell them before buying them? I have not been involved in one of these, so baby steps will be appreciated here... For investors as a whole, returns decrease as motion increases ~ WB
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Rank: Member Joined: 12/1/2007 Posts: 539 Location: Nakuru
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sparkly wrote:hisah wrote:@sparkly, that price upthrust during the 'very nice' FY announcement is going to leave a very bad taste I warned. Remember our discussion. Let's compare notes next October. This super dilutive rights issues will crater this counter badly. Sell while you can then buy post rights, which will be far cheaper anyway. This is KQ 2012 again. @Hisah, I am not one to sell a perfectly healthy share at a loss. I will defend/sell my rights. Touche... For investors as a whole, returns decrease as motion increases ~ WB
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Rank: Veteran Joined: 8/16/2009 Posts: 994
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winmak wrote:sparkly wrote:mthaka wrote:@sparky this is getting murky,does one sell currently ,take up the rights or wait to buy post rights??? For those who are already in, defend your rights or sell the rights (not shares). For those who are out, wanting to get in, buy after rights issue is concluded. @Sparkly forgive my ignorance, has the rights price been officially determined? And, these rights, how do you sell them before buying them? I have not been involved in one of these, so baby steps will be appreciated here... If you have KenGen shares, you will be given "rights" depending on the ratio agreed. If you have say, 100 shares and they announce rights of 2:1 it means you can buy 200 shares at the right price (say 5bob) requiring you to invest 1K. If you don't want to buy the 200 shares (or you don't have cash) you can sell the 200 rights at prevailing market price say, 1 Bob (so you pocket 200). The person you sell the rights to will pay 1000 to KenGen for him to get the shares. Bottomline; you must have the shares to get the rights. Time is money, so money is time. Money saved is time gained in reverse! Money stores your life’s energy. You expend your energy, get paid money, and store that money for a future purchase made in a currency.
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Rank: Elder Joined: 12/25/2014 Posts: 2,300 Location: kenya
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Gatheuzi wrote:winmak wrote:sparkly wrote:mthaka wrote:@sparky this is getting murky,does one sell currently ,take up the rights or wait to buy post rights??? For those who are already in, defend your rights or sell the rights (not shares). For those who are out, wanting to get in, buy after rights issue is concluded. @Sparkly forgive my ignorance, has the rights price been officially determined? And, these rights, how do you sell them before buying them? I have not been involved in one of these, so baby steps will be appreciated here... If you have KenGen shares, you will be given "rights" depending on the ratio agreed. If you have say, 100 shares and they announce rights of 2:1 it means you can buy 200 shares at the right price (say 5bob) requiring you to invest 1K. If you don't want to buy the 200 shares (or you don't have cash) you can sell the 200 rights at prevailing market price say, 1 Bob (so you pocket 200). The person you sell the rights to will pay 1000 to KenGen for him to get the shares. Bottomline; you must have the shares to get the rights. How can spectators like me rip from this
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Rank: Elder Joined: 9/23/2009 Posts: 8,083 Location: Enk are Nyirobi
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enyands wrote:Gatheuzi wrote:winmak wrote:sparkly wrote:mthaka wrote:@sparky this is getting murky,does one sell currently ,take up the rights or wait to buy post rights??? For those who are already in, defend your rights or sell the rights (not shares). For those who are out, wanting to get in, buy after rights issue is concluded. @Sparkly forgive my ignorance, has the rights price been officially determined? And, these rights, how do you sell them before buying them? I have not been involved in one of these, so baby steps will be appreciated here... If you have KenGen shares, you will be given "rights" depending on the ratio agreed. If you have say, 100 shares and they announce rights of 2:1 it means you can buy 200 shares at the right price (say 5bob) requiring you to invest 1K. If you don't want to buy the 200 shares (or you don't have cash) you can sell the 200 rights at prevailing market price say, 1 Bob (so you pocket 200). The person you sell the rights to will pay 1000 to KenGen for him to get the shares. Bottomline; you must have the shares to get the rights. How can spectators like me rip from this In Kenya, Rights depress the share price. However for solid profitable companies, prices tend to recover and shoot up within one year. This is from my experience in KCB, TPS, NIC. If you want to make money, buy ex-rights and wait for the ride IMO Life is short. Live passionately.
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Rank: Elder Joined: 7/11/2010 Posts: 5,040
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sparkly wrote:enyands wrote:Gatheuzi wrote:winmak wrote:sparkly wrote:mthaka wrote:@sparky this is getting murky,does one sell currently ,take up the rights or wait to buy post rights??? For those who are already in, defend your rights or sell the rights (not shares). For those who are out, wanting to get in, buy after rights issue is concluded. @Sparkly forgive my ignorance, has the rights price been officially determined? And, these rights, how do you sell them before buying them? I have not been involved in one of these, so baby steps will be appreciated here... If you have KenGen shares, you will be given "rights" depending on the ratio agreed. If you have say, 100 shares and they announce rights of 2:1 it means you can buy 200 shares at the right price (say 5bob) requiring you to invest 1K. If you don't want to buy the 200 shares (or you don't have cash) you can sell the 200 rights at prevailing market price say, 1 Bob (so you pocket 200). The person you sell the rights to will pay 1000 to KenGen for him to get the shares. Bottomline; you must have the shares to get the rights. How can spectators like me rip from this In Kenya, Rights depress the share price. However for solid profitable companies, prices tend to recover and shoot up within one year. This is from my experience in KCB, TPS, NIC. If you want to make money, buy ex-rights and wait for the ride IMO @Sparkly. I do not understand your optimism with this 70% owned gava stock. What I wonder is, why has the share been depressed since the IPO its around 30% down, 7 years later? What makes you think the next 7 years or more will be any different? The investor's chief problem - and even his worst enemy - is likely to be himself
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Rank: Veteran Joined: 9/18/2014 Posts: 1,127
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Ex-rights for a short term ride you will make money. Longterm however, kengen is a sad tale of a company with respectable performance which happens to be in a capital intensive industry. Large capex with government involvement tends to be a vicious cycle of debt conversions and rights issues. This means dilution is always around the corner which begets a low share price. The main purpose of the stock market is to make fools of as many people as possible.
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Rank: Elder Joined: 9/23/2009 Posts: 8,083 Location: Enk are Nyirobi
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Aguytrying wrote:sparkly wrote:enyands wrote:Gatheuzi wrote:winmak wrote:sparkly wrote:mthaka wrote:@sparky this is getting murky,does one sell currently ,take up the rights or wait to buy post rights??? For those who are already in, defend your rights or sell the rights (not shares). For those who are out, wanting to get in, buy after rights issue is concluded. @Sparkly forgive my ignorance, has the rights price been officially determined? And, these rights, how do you sell them before buying them? I have not been involved in one of these, so baby steps will be appreciated here... If you have KenGen shares, you will be given "rights" depending on the ratio agreed. If you have say, 100 shares and they announce rights of 2:1 it means you can buy 200 shares at the right price (say 5bob) requiring you to invest 1K. If you don't want to buy the 200 shares (or you don't have cash) you can sell the 200 rights at prevailing market price say, 1 Bob (so you pocket 200). The person you sell the rights to will pay 1000 to KenGen for him to get the shares. Bottomline; you must have the shares to get the rights. How can spectators like me rip from this In Kenya, Rights depress the share price. However for solid profitable companies, prices tend to recover and shoot up within one year. This is from my experience in KCB, TPS, NIC. If you want to make money, buy ex-rights and wait for the ride IMO @Sparkly. I do not understand your optimism with this 70% owned gava stock. What I wonder is, why has the share been depressed since the IPO its around 30% down, 7 years later? What makes you think the next 7 years or more will be any different? @Aguy its just another stock in my portfolio where I expect >100% return from capital gains + Dividend in the next 2-3yrs. My average buy is around 9.85. If I wasn't already in it, I would have waited for the rights issue to be completed before jumping in but since I am in already, I must defend/sell my rights or be irredeemably diluted. That's the extent of my relationship with this share. Life is short. Live passionately.
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