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POOR TRANSACTION ADVISE-THE CASE OF KCB RIGHTS
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Hi-Lo
#31 Posted : Friday, July 09, 2010 1:11:43 PM
Rank: Member

Joined: 10/5/2007
Posts: 91
..now that GK has managed to dump its rights a few moments ago at 40cts onto some unsuspecting "Big Money"...then clearly the Rights will succeed...
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VituVingiSana
#32 Posted : Friday, July 09, 2010 1:20:36 PM
Rank: Chief

Joined: 1/3/2007
Posts: 18,350
Location: Nairobi
@muganda - Different economics for Seller & Buyer...

As a seller, you need to divide net 'income' from Rights by number of shares you have...

100,000 KCB = 40,000 Rights
Sell 40,000 Rights @ .40 = 16,000/-
Sell 100,000 KCB @ 18 = 1.8mn
Net proceeds per share = (1,800,000 + 16,000)/100,000

(I have ignored commissions for now coz just an example)
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Kausha
#33 Posted : Friday, July 09, 2010 1:22:21 PM
Rank: Member

Joined: 2/8/2007
Posts: 808
When we raised the flaw in this transaction in this forum and suggested there will be too many rights with minimal interest, people thought we were insane now check!In future KCB should shop well for advisors!
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VituVingiSana
#34 Posted : Friday, July 09, 2010 1:24:22 PM
Rank: Chief

Joined: 1/3/2007
Posts: 18,350
Location: Nairobi
Hi-Lo wrote:
..now that GK has managed to dump its rights a few moments ago at 40cts onto some unsuspecting "Big Money"...then clearly the Rights will succeed...

Hmmm... seems the Rights will succeed (50% needed) coz folks have bought 123mn+ Rights today!

+ those exercise the Rights
+ those who bought Rights
+ those who will ask for additional shares

I think the 50% will be successful...
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Wa_ithaka
#35 Posted : Friday, July 09, 2010 1:35:52 PM
Rank: Veteran

Joined: 1/7/2010
Posts: 1,279
Location: nbi
KCb will definitely get the 50% but wengi ni shingo pande i.e. fear of dilution rather than buying into Martin's dreams
The Governor of Nyeri - 2017
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muganda
#36 Posted : Friday, July 09, 2010 1:37:06 PM
Rank: Elder

Joined: 9/15/2006
Posts: 3,907
@VVS, agreed 0.40*40% = 0.16; not ten cents, was calculating mentally.
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the deal
#37 Posted : Friday, July 09, 2010 1:42:02 PM
Rank: Elder

Joined: 9/25/2009
Posts: 4,534
Location: Windhoek/Nairobbery
VituVingiSana wrote:
Hi-Lo wrote:
..now that GK has managed to dump its rights a few moments ago at 40cts onto some unsuspecting "Big Money"...then clearly the Rights will succeed...

Hmmm... seems the Rights will succeed (50% needed) coz folks have bought 123mn+ Rights today!

+ those exercise the Rights
+ those who bought Rights
+ those who will ask for additional shares

I think the 50% will be successful...

nice move by GOK...they clearly see where this is headed...although they took to long to sell...the buyer has purchased at 17.40 lets see if he will plunged into losses come next week when the price moves to 17 bob...
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VituVingiSana
#38 Posted : Friday, July 09, 2010 1:46:31 PM
Rank: Chief

Joined: 1/3/2007
Posts: 18,350
Location: Nairobi
@thedeal - If you factor in commissions... the Buyer at 17.40 has done OK...

1) Pays commission on the Rights only not the 17/-
2) Can buy a huge number of shares in one swoop thus cuts down admin issues
3) Buying 123mn shares on the open market will mean the price may start rising... so why not just buy the Rights at a slight premium?
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Kausha
#39 Posted : Friday, July 09, 2010 1:48:36 PM
Rank: Member

Joined: 2/8/2007
Posts: 808
@VVS where do you normally get your stats. My boards read 62m rights. Now Gok had 200+ rights. For success we need subscpritions of 443m rights and from the look of things it appears to be a gigantic order as at now. Bear in mind a lot of retail investors will skip their rights our of ignorance. Typically activity in the rights market is indicative of the success of a rights issue, with GoK unable to sell its entire loot unless someone can force NSSF to buy, I am a bit worried on the success of this issue.
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VituVingiSana
#40 Posted : Friday, July 09, 2010 1:52:59 PM
Rank: Chief

Joined: 1/3/2007
Posts: 18,350
Location: Nairobi
Kausha wrote:
@VVS where do you normally get your stats. My boards read 62m rights. Now Gok had 200+ rights. For success we need subscpritions of 443m rights and from the look of things it appears to be a gigantic order as at now. Bear in mind a lot of retail investors will skip their rights our of ignorance. Typically activity in the rights market is indicative of the success of a rights issue, with GoK unable to sell its entire loot unless someone can force NSSF to buy, I am a bit worried on the success of this issue.

I use live streaming data... there is Rich + mystocks

Chances are KCB will extend the Rights period to capture more 'buyers'... Add Rwanda + Uganda NSSF to the mix... Also some Tanzania funds may buy into KCB... Then there is our NSSF as well...

Overall, they will barely make it but they will coz they have KCB Pension Fund + potential GoK buying just enough to get them to 50%...

I expect a few Foreign Funds will do as well... KCB screwed up... they should have done Road Shows like Safaricom & Ecobank.
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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  | | Edit by user: Friday, July 09, 2010 1:54 PM | Reason: Not specified
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