@All,

Well well, this poses a big dilemma! I am having conflicting perspectives;

1. As a long-term investor in kcb, their previous rights issue only managed to reverse capital gains made on paper! Shud have exited at 32-33! Their dividends r nothing special!
2. On the other hand, @16, it wud be an opportunity to increase holding....but but but, who says there will not be yet another rights issue to raise money to expand into, say the West African mkt - repeating the biennial dilution of the stock value?

3. Just when is the right time to slow down on expansion n reward shareholders?

I think I will exit! I am sure with billions of new shares, i can always get them sub 20 in the next 2yrs!

2.

doing the math KCB will be compelled to translate this rights issue into serious profits since as per my calcualtions if one got into the stock now at 23.5bob and participated in the rights issue at 13.6bob their average buy price will be around 20bob but if KCB were to earn PBT of 9.5billion as they project this year and using a sector P/E ratio of 12.59 the price will only be 23.25 which is lower than current market price....

IMHO any short term players should be running clear of this counter....

Issuing a rights issue will cause the shares to flood the NSE hence cost of the share will come down. i was optimistic that this share was headed in the right direction but now am 50/50.
probably an exit would be the best now then return once the shares flood the market????

..when all is said and done...its all about the money.

share dilution loses special quality any stock would have... scarcity.. ease with which large quantities can be mopped up.. KCB will soon be the Safcom of the finance segment.

Yes it has value..but that value will be unlock-able for a while considering liquidity..

for technical purposes..volumes traded and the demand and supply factors... Equity and coop fair far much better.

Prices likely to be lowest in sector once new shares are in...

Drat!!! Got to leave.

@skylat KCB expect earnings to pass 9billion this year and judging by that alone snd the fact that investors expect rights issue cash to be translated to profit there is not way the price can fall to 13bob...

if it does then we will have an extremely bargain stock for the picking