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Kenya Commercial Bank offers rights issue at Ksh 17......Is this a fair Price ?
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Kausha
#21 Posted : Wednesday, June 16, 2010 2:59:28 PM
Rank: Member

Joined: 2/8/2007
Posts: 808
Thambupm, please empty your purse completely, i doubt if there are any serious shareholders taking up their rights including GoK. Stop equating TBill rates with liquidity on the NSE, that's from banks who have refused to lend to Mwananchi and ndung'u is determined to force them and he will force them to lend to wananchi.

You can't surely equate KCB's PE and Equity, do a check of the forward PE for the two i.e expected EPS for 2010 under current market price and you will realize why Equity trades at a higher multiple.
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My 2 cents
#22 Posted : Wednesday, June 16, 2010 3:08:38 PM
Rank: Veteran

Joined: 6/2/2010
Posts: 1,089
Kausha wrote:
"The deal" uko bere kama mfuko ya chati! Knowing government they would not have accepted to be diluted if stakes were high, they would have forced a scheme to ensure they retained control eg debt, however it's one of those instutions GoK doesn't place much strategic value now. If GoK is is below 20% shouldn't the entire board change at the very least? Still can't understand why KCB refused the sane route - debt.

This time around rights are many ngoja July, it will be a BOGOFF!



The government is broke! They would not afford to participate even if they wanted. I am sure they are only too happy to sell their rights; might bridge the budget gap a little.

FYI they also sat out in the previous two offerings. Which is not a bad thing. Too much government = mismanagement.
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young
#23 Posted : Wednesday, June 16, 2010 5:05:50 PM
Rank: Elder

Joined: 6/20/2007
Posts: 2,074
Location: Lagos, Nigeria
With a 2 for 5 dilution, my thought was that the price will be circa 14 bob.
Notwitstanding my 5 digits holding in KCB, on a final note I will NOT take the rights, will deploy such funds to other areas.
Good Luck to all
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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VituVingiSana
#24 Posted : Wednesday, June 16, 2010 5:09:46 PM
Rank: Chief

Joined: 1/3/2007
Posts: 18,349
Location: Nairobi
Low bar to 'successful' Rights of 50%...

Now @young might know of a Nigerian Bank which wants to expand locally... They could easily gain 25% of KCB by buying up the Rights... or simply applying for the shares!

If KCB is smart... they shud look for a Chinese Investor like Stanbic... Chump change for most large Chinese Banks!
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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the deal
#25 Posted : Wednesday, June 16, 2010 5:41:21 PM
Rank: Elder

Joined: 9/25/2009
Posts: 4,534
Location: Windhoek/Nairobbery
young wrote:
With a 2 for 5 dilution, my thought was that the price will be circa 14 bob.
Notwitstanding my 5 digits holding in KCB, on a final note I will NOT take the rights, will deploy such funds to other areas.
Good Luck to all

why let yourslf get diluted??? from your posts you believe in KCB's future which definitely looks bright...its moments of confusion like this which provide opportunities...i'm broke at the moment i will go in right now...but August i'm going in..i'm still waiting for your feature on the JSE...thats where my future lies...its close to home...smile smile smile
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Evolve
#26 Posted : Wednesday, June 16, 2010 5:43:41 PM
Rank: Member

Joined: 9/25/2007
Posts: 96
@young, I would want to believe that the offer price for the rights issue would only have been Kshs 14 if they were to issue shares as per the initial plan (1.1bn shares as opposed to .887bn shares). By the way, what informs your decision not to take up the rights?
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guru267
#27 Posted : Thursday, June 17, 2010 11:32:19 AM
Rank: Elder

Joined: 1/21/2010
Posts: 6,675
Location: Nairobi
thambupm wrote:
But as I indicated earlier, even without this, there is room for an upward in price to match the PE of the likes of Equity.


@thambupm its wrong to think equity and KCB can trade on the same P/E.. just consider Equity produced a 43% Q1 and KCB posted a mere 10% growth and equity is expected to grow earnings much faster than KCB hence the much higher P/E
Mark 12:29
Deuteronomy 4:16
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thambupm
#28 Posted : Thursday, June 17, 2010 6:59:36 PM
Rank: New-farer

Joined: 12/12/2009
Posts: 6
Location: Nairobi
I agree that Equity has a better PEG than KCB. But for the medium to longterm investor that I am, it is a matter of time before convergence. I also think there will be some consolidation of costs for KCB in the offing whose gains will hit the bottom line.

I am just curious - why would someone hold onto a 5 digit portfolio for a share they expect to hit 14 post rights? If there is conviction about this, why not exit at 21 and buy back at 14?
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qw25041985
#29 Posted : Thursday, June 17, 2010 8:55:25 PM
Rank: User

Joined: 5/9/2010
Posts: 1,418
Location: Nai
KCB better show me where they took the money from the last rights issue before they ask for more money from me. This is just robbin kenyans of their hard earned cash in broad day light
Your future depends on your dreams so go to sleep !
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VituVingiSana
#30 Posted : Friday, June 18, 2010 2:03:29 AM
Rank: Chief

Joined: 1/3/2007
Posts: 18,349
Location: Nairobi
@qw - Then dont give them more money!

@tham - Yep, but convergence also implies similar management quality... Equity cant grow 50% every year but for the next 2 years I see them outpacing KCB
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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