The Capital Markets Advisory Council (CMAC) has encouraged the existing local shareholders in Kenya Commercial Bank (KCB) to take advantage of the recently announced rights issue and buy extra shares.
According to Olivier Kamanzi, the Deputy Executive Director at CMAC, local investors have an opportunity to buy extra shares at a discount.
“The existing shareholders will buy rights issue at a 20 percent discount and for every 5 shares, they will be offered two extra shares,” said Kamanzi.
According to the information from KCB, the trading of the rights issue will commence on July 1st 2010 at a right issue price of Rwf122 approximately.
KCB has registered a total turnover of Rwf14 million from transactions on the Rwandan market since the time it crossed listed.
Kamanzi also said that although the market in Rwanda is young but through sensitization, they hope that people will participate in the right issue.
However, in august the general public besides the shareholders will be given an opportunity to invest KCB’s rights issue.
Currently, the bank’s share price is trading at an average price of Rwf156 down from a close of Rwf165 on April 14, when it announced plans for the KCB Rights Issue.
The KCB rights issue will increase the bank’s paid up capital to Kshs3.1billion shares of Shs1 each from 2.2 billion shares.
This will be the third time the bank is seeking to raise funds through a rights issue since it’s first one in 2004 which raised some Kshs2.45 billion and a Kshs5.5 billion issue in June 2008, both of which were oversubscribed.
In the 2008 the KCB rights issue, which allowed shareholders to buy one share for every nine, the new shares were sold at Kshs25 per share which marked a 20 percent discount from the then trading price of Kshs31.50.