KIRTI wrote:I think instead of invest in KPLC right issue, invest that money to other counters. Now price are good so you will make more money. like Kenol @ 9.80, KCB @ 21.50, SCBK @ 260, Eqity @ 25.75, DTB @ 130. You might get in April 2011 Kenol @13, KCB @ 26, SCBK @295, Equity @ 28, DTB @ 180.
@ KIRTI: I have adopted a similar strategy as the bulk of the market gets fixated on KPLC. Some interesting bargains currently exist in the market majority of which you have highlighted above with KenolKobil,DTB and KCB topping the list.
KenolKobil and DTB are trading at forward P/Es of between 8-9 while KCB is at a forward P/E of less than 11.
Investing in any of the three at current prices should easily deliver a 20% capital return within the next four months.
I project a similar capital gain return from KPLC on the best case scenario assuming an investor buys rights at Ksh 3 and pays for the share at Ksh 19.50 (Total of Ksh 22.50). A 20% gain would place the share at Ksh 27.
The low unit value of KPLC seems to have attracted the retail/speculative segment of the NSE and my fear is that KPLC will soon have a similar investor profile with Mumias. Share price volatility may thus occur in the short term for KPLC a situation that may trap the share in the Ksh 25-27 range for the good part of 2011 as institutional investors mop up the excess liquidity. It however helps that the GoK will illiquidate half of the KPLC shares.
Happy hunting.
x handle: @stocksmaster79