501 replies to this topic

[Queen B]

Got this from FNB today regarding the rights issue

It explains it pretty well

Attached Files

•  Share Investing Rights Issue.pdf   92.03KB   41 downloads

[peanuts]

r8 + npl price = share price . the current share price tells you what the market thinks the new price would be - +-13.3  . the bee shareholder could sell their npl's . with the rights issue price so low it means the underwriter would not be getting any shares . should the underwriter get any shares it means there were no buyers for npl at 1 cent . the underwriter dont buy the npl's . it only pays 8 . there could be a stampede   

[soutie]

Lazy question how can they assume the post rights price...?

 

If the NPL's are R8 the market will determine the price of the stock surely.

 

If as mentioned the BBBBBBEEEEEE crowd has to sell at R13 would 10% or so extra shares hitting the market matter.

 

Who is gonna fund the BBBBBEEEE crowd their stake to follow their rights...?

 

Sitting on the sidelines ATM me is

[peanuts]

you could decide not to participate and sell your nil paid letters(right to buy the new shares) . it should stay in balance . the day you receive your npl's the price drops to 13 and you sell your npl's for 5 . you learn by being there - for next time . the behaviour of the share price should not comfort you .

[Queen B]

So, correct me if my mathematics is incorrect.

 

Assuming post rights the price is at R13.05 as per SENS.

 

For every 100 shares you can purchase 84 at R8.00

For the current purchase value to equate to that post rights the price would have to be about R17.29.

Using a base of 100 owned shares for the calculation ----

 

100 x R17.29 + 84 x R8.00 = R2401 (Purchase value)

184 * R13.05 = R2401. (Post rights value)

 

Does this make sense?

 

So that's the gamble!

Either sell now and buy again at the lower price, or take up the rights issue and hope you even out

From what I understand from you bphartell, anything lower than R17.29 at the time, will mean a loss in total value

[HendrikB]

So, correct me if my mathematics is incorrect.

 

Assuming post rights the price is at R13.05 as per SENS.

 

For every 100 shares you can purchase 84 at R8.00

For the current purchase value to equate to that post rights the price would have to be about R17.29.

Using a base of 100 owned shares for the calculation ----

 

100 x R17.29 + 84 x R8.00 = R2401 (Purchase value)

184 * R13.05 = R2401. (Post rights value)

 

Does this make sense?

 

yeah. it does make sense. 100%.

[bphartell]

Because Abil wants more capital, its decided to offer new shares at R8.00 a share via a rights issue.  Thus, if you're an existing shareholder,

the price of the current share price will become diluted by the additional new shares that are offered at a discount.  However, one would expect a huge demand for shares at R8.00 which means existing shareholders might still be reluctant to sell their existing holding as they feel the share price will hold up during this price offering.

 

I'm no expert, but that's how I see it.  BTW... I hold Abil shares.  

So, correct me if my mathematics is incorrect.

 

Assuming post rights the price is at R13.05 as per SENS.

 

For every 100 shares you can purchase 84 at R8.00

For the current purchase value to equate to that post rights the price would have to be about R17.29.

Using a base of 100 owned shares for the calculation ----

 

100 x R17.29 + 84 x R8.00 = R2401 (Purchase value)

184 * R13.05 = R2401. (Post rights value)

 

Does this make sense?

[HendrikB]

Thanks Hendrik

So the shares will be available at R8.00 on the normal share code as I understand it?

What direct impact would it have on the existing share price and how do we purchase at the discounted prices via platforms like I am currently using which is FNB

 

Hi QueenB

 

I use FNB as well.  Here are you options:

 

Please note that you have the following options: -

 

Option 1: - Sell all or part of your rights(Nil paid Letters) (through on-line banking or calling 0860 742 737)

(Please note that instructions to sell will not be attended too, this has to be done through the online banking platform or by calling 0860 742 737)

Option 2: - Buy additional rights (Nil paid Letters) on the market (that have to be exercised by 04^th December 2013)

Option 3: - Take up rights at cost (TBA)

(Please note that In the event that you elect to exercise your rights (nil paid), the subscription cost must be credited to your Share Investor Account by the 03^rd December 2013)

Option 4: - Lapse (Take No Action)

 

Oh and here:

 

 Kindly be advised that in the absence of any written or telephonic instructions by the 04^th December 2013 (15H00 SA Time) the default will be applied i.e. LAPSE

 

NB. When responding kindly quote your Share Investing account number (this is for security purposes) as well as the number of shares you wish to exercise.

 

Instructions may be withdrawn or amended up to our response deadline.

 

 

 

Norman Mbambo | Corporate Actions Controller | Share Investing | Retail Banking
6th Floor, 2 First Place, BankCity, Johannesburg | Tel: (087) 73608316| Fax: 011 352-0143
E-mail: shareinvestingCA@fnb.co.za| Web: www.fnb.co.za | Mobile: www.fnb.mobi

Edited by HendrikB, 01 November 2013 - 11:33 AM.

[peanuts]

you get the right to buy 85 for every 100 you have . you either have to sell now or participate . the price will drop to 13 and below . you could end up with having to many shares . the underwriter wanted the issue price as low as possible .

[Queen B]

Because Abil wants more capital, its decided to offer new shares at R8.00 a share via a rights issue.  Thus, if you're an existing shareholder,

the price of the current share price will become diluted by the additional new shares that are offered at a discount.  However, one would expect a huge demand for shares at R8.00 which means existing shareholders might still be reluctant to sell their existing holding as they feel the share price will hold up during this price offering.

 

I'm no expert, but that's how I see it.  BTW... I hold Abil shares.  

Thanks Hendrik

So the shares will be available at R8.00 on the normal share code as I understand it?

What direct impact would it have on the existing share price and how do we purchase at the discounted prices via platforms like I am currently using which is FNB

[delta66]

bang on!!

[HendrikB]

I also think that having a quality underwriter in their stable gives African Bank more credibility. 

[HendrikB]

Would also appreciate if someone could explain this. 

Because Abil wants more capital, its decided to offer new shares at R8.00 a share via a rights issue.  Thus, if you're an existing shareholder,

the price of the current share price will become diluted by the additional new shares that are offered at a discount.  However, one would expect a huge demand for shares at R8.00 which means existing shareholders might still be reluctant to sell their existing holding as they feel the share price will hold up during this price offering.

 

I'm no expert, but that's how I see it.  BTW... I hold Abil shares.  

[Queen B]

There she goes!

Back up to the R17's soon

[bphartell]

In layman terms, what impact will the rights issue confirmed this morning have on the share price for ABL

And what are the advantages of having shares currently?

Would also appreciate if someone could explain this. 

[Queen B]

In layman terms, what impact will the rights issue confirmed this morning have on the share price for ABL

And what are the advantages of having shares currently?

[Jonny]

You would think that with the coming rights issue there will be a

significant discount on the share price, let's say between 20-30%.  

That will give you a price between R12-R13.  So why on earth is Abil holding

up so well?  What am I missing here?  Any suggestions? 

Not sure about what effect the rights issue will have, but I know the previous voting they gave a bailout to their BEE scheme because the scheme holds shares till R13 a share and then has to sell. This would have flooded the market with something like 10% of the total shareholding. The bailout is to keep the scheme alive while the share price is low. Never the less, I would be VERY worried if it moves below R13 because I'm not sure what the next minimum value for the scheme is. If the BEE scheme is forced to sell it would not be pretty.

[HendrikB]

You would think that with the coming rights issue there will be a

significant discount on the share price, let's say between 20-30%.  

That will give you a price between R12-R13.  So why on earth is Abil holding

up so well?  What am I missing here?  Any suggestions? 

[Queen B]

This ABL share has unusual daily trend

Always goes down in the morning, then has a surge up again in the afternoon

Unusual. But I guess there is nothing usual about this share afterall

[Queen B]

ABL doing its afternoon surge again