Forum Archive Index - July 2002

["Peter Riches" <peter@kairos.ws>]

Rockbottom - there is also a special dividend of 2.56 cents (plus credits)
going ex at the same time as the annual dividend and rights. I think this
makes quite a difference to any potential savings one would get by buying
the rights. Also there is a small (about 1 cent per unit) dilution effect as
the rights subscription price is less than the market price.

Having said that, I would be suprised if the price drops by the full value
of both dividends - especially given that to do so would mean that KIP would
be trading at quite a discount to NAB.

Peter


> My calculations are slightly different.
>
> 1.    On page 3 of annual report it states "The final dividend is 4.53
cents
> per unit and has imputation credits attached of 0.158 cents per unit
giving
> a gross dividend of 4.688 cents per unit."
>
> 2.    Say the share price is now 97c, for comparative purposes we only
need
> to deduct the after tax dividend (This would vary depending on your tax
> rate) but say net dividend of 3.5cents. This makes the after div value of
> the shares 93.5c.
>
> 3.    The cost of the rights (7c) plus the new shares 82c makes 89c.
>
> 4.    Saving by buying the rights over the head share approx 4.5c.
>
>
>
> Rockbottom
>
>
>
>
>
> ----- Original Message -----
> From: "Peter Riches" <peter@kairos.ws>
> To: <sharechat@sharechat.co.nz>
> Sent: Friday, July 05, 2002 7:10 AM
> Subject: [sharechat] Re: Kiwi Income Rights
>
>
> > Thanks Malcolm. I had forgotten about the dividends. According to my
maths
> > the market price matches the theoretical price almost exactly when the
> > dividends are considered:
> >
> > Approx. theoretical price ex 7.09 cent dividend = 96-7 = 89 cents
> > Dilution effect = ((89*6)+82)/7 = 88 cents (= theoretical price ex
rights
> > and dividends)
> >
> > Subscription price + rights price = 82+6.5 = 88.5 (= current market
price)
> >
> > Interesting to note that, according to the rights invesment statement,
the
> > net asset backing after the rights issue will be $1.05 per unit. This
> means
> > that at 88 cents KIP would be trading at more than a 16% discount  to
NAB.
> I
> > believe this is more than twice the discount it was trading at before
the
> > rights issue was announced. Wonder how a 16% discount to NAB compares
with
> > other property shares? Seems quite a big discount for what seems to me
to
> be
> > a quality share that is paying around 11% dividends per annum?
> >
> > Peter
> >
> >
> > > Peter Remember it goes ex a very large dividend at the same time
> >
> >
> > > >Greetings share-chatters
> > > >
> > > >Can anyone explain the maths involved in the current KIP rights
issue:
> > > >1 rights issue for every 6 units held
> > > >Subscription price = 82 cents
> > > >Rights are trading at about 6.5 cents
> > > >Head share is trading at 96 cents
> > > >
> > > >Why are the rights trading at 6.5 cents - does this imply that the
> market
> > > >expects the ordinary unit price to drop to around 89 cents once the
> > rights
> > > >cease trading? Is this a premium or discount to the theoretical
price?
> > > >
> > > >Thanks in advance
> > > >
> > > >Peter
> > >
> > >
> > >
> > >
> > >
> > >
> > > _________________________________________________________________
> > > MSN Photos is the easiest way to share and print your photos:
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> > >
> > >
> >
>
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