Rights Issues

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Rights Issues

Post  SylviaHaik on Thu Nov 29, 2012 8:37 pm

Can someone please tell me the consequence of not participating in the Rights Issues. As a foreign investor and the companies' insistence of raising cheques and attaching to Letters of Allotments plus a 14 day deadline makes it quite difficult. Presently, Coco Lanka has a 5:4 Rights Issue (voting) @ Rs.35.00 dead.line 7th December. The closing price at at 29th November was Rs.34.40. Should I take it as a blessing I cannot participate and to buy the shares on the open market.

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Re: Rights Issues

Post  smallville on Wed Dec 12, 2012 10:22 am

When a right issue is announced, due to the attractiveness in it, the share value may go up or down. Some ppl prefer companies announcing higher proportions like 10:1 where 10 rights for each share held. So when u buy 1000 shares u get 1000 rights.

Sometimes in these occasions u may be able to sell the rights in open market for a good price too without converting rights to shares.

The buying is depend on your choice, however when rights come to the market or on the XR date (Excluding rights - means the buyer who buys shares on this date onwards is not eligible to participate in the rights scheme. Therefore the value of the normal comes down.)

Pls do register inour main site for investment related knowledge and discussions. Our main site is "forum. Srilakaequityforum.com"

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