Forum Archive Index - July 2002

["Rockbottom" <rockbottom@ihug.co.nz>]

Thanks Peter, missed the special div.

Now redoing the calculations.

1.    The final dividend is 4.53 cents plus imputation credits 0.158 plus
2.56cents special div. plus imputation  credits not known and estimated at
Nil gives gross dividend of  7.248cents. Deduct tax at average rate of 33%
gives net cash received  of  4.856 cents (say 5 cents)
 2.    Share price is now 97c, for comparative purposes we only
 need to deduct the after tax dividend of 5 cents. This makes the ex div
value of
the shares 92c.
3.    The cost of the rights (6.7c) plus the new shares 82c makes 88.7c.
4.    Saving by buying the rights over the head share approx. 3.3cents.

I believe the only difference between the head shares and the rights now is
the dividend to be received. The split has already been made and will be
reflected in the share price  now.


Rockbottom
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------------------
----- Original Message -----
From: "Peter Riches" <peter@kairos.ws>
To: <sharechat@sharechat.co.nz>
Sent: Friday, July 05, 2002 10:34 AM
Subject: Re: [sharechat] Re: Kiwi Income Rights


> 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



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