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KCB rights issue
Rank: Member Joined: 10/26/2008 Posts: 380
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I keep wondering what will happen when the rights reach -0.05, and the share price < 17. Today, the rights are 0.20.
What is the fallback plan for KCB because at this rate, i highly doubt the success of the rights issue.
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Rank: Chief Joined: 1/3/2007 Posts: 18,204 Location: Nairobi
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I think today was the last day to sell Rights... Any news on whether KCB has asked for an extension...? Did GoK sell all their Rights? Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Veteran Joined: 5/23/2010 Posts: 868 Location: La Islas Galápagos
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Mkimwa wrote:I keep wondering what will happen when the rights reach -0.05, and the share price < 17. Today, the rights are 0.20.
What is the fallback plan for KCB because at this rate, i highly doubt the success of the rights issue. @mkimwa ??? The right is just a traded option, and by analogy cannot possibly be -vely valued. It can however be 0 if it can be confirmed the underlying share will never ever ever achieve the strike price of 17 (how this can happen would is a separate topic). In practice, if the share goes below 17, why buy the right when you can simply buy the existing shares? A bad day fishing is better than a good day at work
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Rank: Chief Joined: 1/3/2007 Posts: 18,204 Location: Nairobi
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@Statmeister is correct as regards the Call Option aspect... BUT if you add in (very high) costs in Kenya there is logic in buying Rights @ 5cents even if the Share Price is 16.80 (if strike is 17/-)... Commissions are paid on the VALUE of the Rights so 100,000 Rights @ 0.05 = 5,000/- + 2% comm = 5,100/- or 5.1 cents/share Add 17/- (no commission on Rights Exercise) = 17.051 A commission of 1.5% on 100,000 KCB shares @16.80 = approx 25.5 cents So 16.80 + 0.255 = 17.05 There are other considerations as well... but another day! 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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VituVingiSana wrote:I think today was the last day to sell Rights... Any news on whether KCB has asked for an extension...?
Did GoK sell all their Rights? Only 25million rights traded today. It seems KCB will only achieve slightly above 50% subscription. If the rights fail then current market price of 17.75 is a bargain. Time to start looking at Plan B
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Rank: Elder Joined: 12/9/2009 Posts: 6,592 Location: Nairobi
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VituVingiSana wrote:I think today was the last day to sell Rights... Any news on whether KCB has asked for an extension...?
Did GoK sell all their Rights? Yap on Friday last week, you'll see 120m moved.
BBI will solve it :)
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Rank: Member Joined: 10/18/2007 Posts: 217
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IF KCB HADN'T THROWN BILLIONS OF SHAREHOLDERS MONEY INTO DEVANI'S PIT LATRINE, THEY WOULD NOT BE FORCING US TO COME UP WITH EXTRA BILLIONS.OTHERWISE A GOOD BANK BUT WITH MANAGEMENT THAT HAS STOPPED THINKING.
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Rank: Elder Joined: 9/15/2006 Posts: 3,906
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2012 wrote:Yap on Friday last week, you'll see 120m moved. -@2012 is right but there are many who were selling -so reliably heard Gov sold just over half of their rights But I see KCB is still around 17.70, makes me wonder why people would buy if abundant rights were still available. But if it was me, and all the chips were down, for the good of the market and all, with a pool of pension funds and like minded thinkers, and if it was too big to fail, I would support the price - but that's just me.
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Rank: Elder Joined: 1/21/2010 Posts: 6,675 Location: Nairobi
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This rights issue better be a success... Because with all the marketing then there should be no reason for undersubscription Mark 12:29
Deuteronomy 4:16
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Rank: Elder Joined: 6/23/2009 Posts: 13,747 Location: nairobi
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the half year results for KCB to be released tomorrow at 10 a.m will confirm this 110 year old's strength.
COOP 255,000 ABP 15.85; IMH 5,000 ABP 35.55; KQ 604,200 ABP 6.96; MTN 23,800 ABP 5.20
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Rank: Elder Joined: 9/23/2009 Posts: 8,083 Location: Enk are Nyirobi
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Got some at 17.75 today. I know i will make some money. Life is short. Live passionately.
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Rank: Elder Joined: 1/21/2010 Posts: 6,675 Location: Nairobi
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obiero wrote:the half year results for KCB to be released tomorrow at 10 a.m will confirm this 110 year old's strength. @obiero isn.t it too early?? And its not permitted to release results during trading hours Mark 12:29
Deuteronomy 4:16
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Rank: New-farer Joined: 5/20/2010 Posts: 69
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what about an investor who buys the rights at .25\- lets say 100 000 rights, what profit does he stand to gain (or lose)?
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Rank: Elder Joined: 9/25/2009 Posts: 4,534 Location: Windhoek/Nairobbery
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sparkly wrote:Got some at 17.75 today. I know i will make some money. @Sparkly dont forget the dilution????
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Rank: Veteran Joined: 5/23/2010 Posts: 868 Location: La Islas Galápagos
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guru267 wrote:obiero wrote:the half year results for KCB to be released tomorrow at 10 a.m will confirm this 110 year old's strength. @obiero isn.t it too early?? And its not permitted to release results during trading hours results in 13 days (ignoring weekend) . . . unlikely as accounts have to be reconciled, financials prepared, results discussed, some cooking happens, then more discussion and then some more (but final) cooking . . . and trust me that right now, the KCB finance team is more worried about the rights than H1 results A bad day fishing is better than a good day at work
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Rank: Elder Joined: 7/22/2009 Posts: 7,558
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The way I see it, under subscription will have two effects: 1) It will betray the low confidence investors have in the bank [as a business], the stock and/or the management - Share price heads south. 2) The dilution will not be a big as earlier envisaged - Share price stabilizes or heads north. The question is which of the two will carry the day? 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: Elder Joined: 9/23/2009 Posts: 8,083 Location: Enk are Nyirobi
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the deal wrote:sparkly wrote:Got some at 17.75 today. I know i will make some money. @Sparkly dont forget the dilution???? @the deal KCB's dividend yield is currently 64% larger than the market yield, second only to BAT and Sameer. I expect profitability to improve on the basis of the capital injection, wiping out the effect of the dilution. The DY will revert to the market yield, meaning an up to 50% rise in the price. of course this is just one way of looking at it. Life is short. Live passionately.
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Rank: Veteran Joined: 6/17/2009 Posts: 1,621
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Half year pre-tax profit is up only 16%,where does the share price go?
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Rank: Chief Joined: 3/24/2010 Posts: 6,779 Location: Black Africa
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In my opinion, those are not exactly terrible results, but I think they will be lower than the market average (we'll see when other banks release their results) GOD BLESS YOUR LIFE
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Rank: Elder Joined: 9/25/2009 Posts: 4,534 Location: Windhoek/Nairobbery
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cnn wrote:Half year pre-tax profit is up only 16%,where does the share price go? whats the PAT??? I think this will be the lowest in the banking sector...expect Equity to do 50% and above...
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