Hi!!Hi!!Hi!!Hi!!Hi!!Hi!!Hi!!Hi!!Hi!!Hi!!Hi!!
Ho!!Ho!!Ho!!Ho!!Ho!!Ho!!Ho!!Ho!!Ho!!Ho!!Ho!!
Hu!!Hu!!Hu!!Hu!!Hu!!Hu!!Hu!!Hu!!Hu!!Hu!!Hu!!

Being just a toddler in this investing game I am yet to find a suitable style...I have studied the market a great deal and come to an independent conclusion that there is no much upside to the index 700-1200 at most...then a significant 30% dip or more that will wipe that grin outta john come latelys investors faces...in short it will be a decade of a impoverishing sideways grinding trend until all the sins of 2004-2008 speculative mania period are paid for and the market sells at a P/E of 7 or so...well thats what the charts foresee...or maybe I just want to lock in the profits and use them for other endeavors thats why I convince myself so....but any way I am not adding a single cent to the NSE pyramid scheme at these levels...I just need to maintain what I have and build an investment arsenal for future bargains.

@vvs, I think of the KCB rights issue as a call option.

Investors are faced with two options:
a)hold their positions and carry the risk of the share trading below 17

b)or, sell the share @ 18.5 and buy the rights at 0.5 (this is a hedge against the share trading below 18 - this is obvious now as the share is <17.75)
- If the share goes below 16.5 before rights closure, they can skip their rights, lose a max of 0.5*2% comm, and buy the actual share.
- If the share remains at or above 17.5, exercise the rights at 17.

If I was a KCB shareholder, i'd have taken option (b). . . but am not (they almost busted their capital margin that’s why they are issuing rights . . ., and they will keep issuing and the share will keep going down instead of up)

As for now, have they actually said what they want to do with 15bn or they are just saying they want it? Come to think of it, why are they issuing rights when they could just re-invest their 6bn profits for 2 years, cost free?

@ pro-KPLC wazuans, when KPLC conversion comes and either the share starts to look risky or the market price is much higher than the conversion, then I will switch shares for plenty of rights

of course if i will be liquid, i'll prefer to hold + exercise . . .)

But don’t worry, lots of investors (pension funds et al) won’t mind owning 100% KPLC

@statmeister - You laid out the options very well...

Last week, I saw Rights trading at 1/- so at 18.65 (less costs) I was already 'ahead' of the Strike Price + Rights Premium...

I knew the Rights would 'fall' in price coz GoK had not come on the market + folks start selling Rights as we get closer to Trading Expiration date...

Anyway, all said & done...

If the subscription is less than 50% + 2Q results are so-so... the sellers might come out in force thus a sub-17 is possible...

Similar but not so drastic wud be sub-100% subscription...