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Topic: KCB-THE SHARE TO WATCH - stocksmaster  [993 views | 4 replies]
Wednesday, February 13, 2008 18:11

KCB is in the process of finalizing details of a rights issue.Below are some of  the reasons why this is the share to watch in this First Quarter of 2008:

  • The rights issue will be the largest ever of any company in the NSE (that means East and Central Africa!)-worth about Ksh 5 B(Comperable to 3/4 of the Kengen IPO)

  • The company is about to announce a year end profit of Ksh 3 B net profit that translates to an EPS OF Ksh 1.50.

  • The company has considerable reserves which it is bound to tap into in raising the Ksh 5 B.This means the Rights issue will be accompanied by a sort of bonus issue to capitalise a good chunk of the company reserves account.

  • Approval of transaction advisors by the banks board is on the 28th of February,shareholders are to give their approval during the AGM sheduled for 9th May 2008.

  • This bank is expanding regionally at a terrific rate-a critical aspect in case of persistent unrest in one country.

Happy hunting

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Monday, February 18, 2008 15:13


lets talk about anything!
great [maasai]
Monday, February 18, 2008 15:12

A penny SAVED is a penny wasted if not INVESTED.
Monday, February 18, 2008 08:01

Lets briefly reflect on the the possible senarios of this issue:

  • The Share reserves for KCB as at 3rd Quarter 2007 were Ksh 7.34 B,the Share Premium was Ksh 2.4B. As at end of 2007,this value value of reseves should rise to Ksh 9B. It is this money that would be tapped into in case of a bonus issue.
  • If KCB intends to do a purely rights issue to raise the 5B,then the following is the likely scenario: The company would create 250,000,000 shares to be offered at a ratio of 1:8 at a price of Ksh 20(This is 35% discount on prevailing market price).
  • The big question which should pre occupy us is,will the cash strapped govt of Kenya take up their rights?

Happy hunting

Wednesday, February 13, 2008 18:37

Good Analysis,I fully agree with you.!!! Embarking on rights issue at this point in time is a very creative idea.

 We pray the political logjam should be resolved as soon as possible.

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