SEYB Right issue

http://www.cse.lk/cmt/upload_cse_announcements/8401298982776_.pdf

1:3 at Rs 75 Voting
1:3 at Rs 35 Non Voting

Now to see Share price fluctuations..

slstock wrote:http://www.cse.lk/cmt/upload_cse_announcements/8401298982776_.pdf


1:3 at Rs 75 Voting

1:3 at Rs 35 Non Voting

Now to see Share price fluctuations..

interesting to see how market react to this.

it is a good news !

I remember when ATL right issue was published the share prices went 4.2LKR to 3.50LKR. (I am not sure about the price but it went down), But after couple of weeks it came up again to 3.90LKR levels.

I wonder what will be effect after the right issue....

In the recent past right issues has given a negative effect. Ex. OSEA, CSEC, BBH, SMLL

Let's see how SEYB behave.

the main issue is that the X shareholding list is dominated by retailers who may not have the buying power to subscribe to the rights (someone holding 1000 shares will have to pump in another12k) while the N shareholding list still has Ceylinco related entities who may not have the cash to buy the rights. So there may be a dumping of the shares/rights in the market.
Lets see how this rights issue works out....

oh... I was shocked to hear this. like a head shot!!!!
Never expect such announcement because they already announced attractive dividend too.

I think market, specially today market may react negatively and hope to see SEYB.X at 40 tomorrow.

dividend is not something that can move the share prices up.
Because as i feel most of the investors are expecting of capital gains rather than dividends.

I feel like selling all my SEYB.X and SEYB.N at a loss on tomorrow and rebuy later when i come down. But then again i have the holding power. Only thing is i dont want my portfolio to get more red and red,.... Its been red for several weeks now,,,

interesting. pay dividend and also raise more money.

but why do you take this so negative?
OSEA was a flop because rights were priced very close to market price (sometimes buying from the market was cheaper)
BBH because they don't have any any business right now.
This price is atleast a little attractive. Then again, how do you predict this market :)

So is it worth opting to exit early morning tommorow?

lately market has been so unkind on rights, sub divs, cap. of resvs..
Now SAYB with a rights issue.. PPl who bought at 46 levels even may wonder wats gonna happen next..

Above post has shown general mentally during the current market circumstances.
Look at it this way, the monies comes from the rights will increase financial capacity of the SeyB hence they would have opportunities for new business which could increase the profit in mid to long term.

npp wrote:interesting. pay dividend and also raise more money.

I also have a considerable lot bought around 46 level...This looks little contradicting to pay out money as dividends to its SHs and again after one week asking for money from them...Im also curious how market would react..

I ll subscribe rights and hold on them as Seylan has very good future with new management.

We have seen some bad experience for stocks after the announcement regarding right issue.
The stock price is coming down drastically.
The best recent example is SMLL.
After the right issue it came down.
Normally(Not Always) the CSE is going with previous experience.
100% we can not say It will happened to SEYB.But Care fully.If it came down,it is difficult to go up.And it will take time go up.

Do you analysis yourself and make a wise decision.

Thanks.

MarketResearch wrote:We have seen some bad experience for stocks after the announcement regarding right issue.
The stock price is coming down drastically.
The best recent example is SMLL.
After the right issue it came down.
Normally(Not Always) the CSE is going with previous experience.
100% we can not say It will happened to SEYB.But Care fully.If it came down,it is difficult to go up.And it will take time go up.

Do you analysis yourself and make a wise decision.

Thanks.

SMLL is a special case. The price dropped dramatically from around 85 to 75 when peoples leasing sold 10% of their holding. Then news probably leaked of an announcement and the price shot back upto 90. I think it was helped there partly because last time they had rights, the share was trading at ridiculous price levels kind of like WAPO.

Then on the day of the announcement, retailers piled in. The insiders who had early access to the news or guessed started to 'sell on the announcement' which caused the price back down. IMHO the price of SMLL would stabilize around the 80-85 range.

SEYB is a different matter. The news does not seem to have leaked before the announcement, so it doesn't look like a bunch of people have collected to sell on the announcement. So I think that the price will stay within + or - 2 rupees from the current price.

Both SEYB.X and SEYB.N are oversold. So don't rush to sell your holding. At the same time. Don't rush to buy any shares either. Watch how it behaves for a few days and then make your decision.

Dear tubal,

I totally agree with this part of your comment:

"Both SEYB.X and SEYB.N are oversold. So don't rush to sell your holding. At the same time. Don't rush to buy any shares either. Watch how it behaves for a few days and then make your decision."

Thanks.

tubal wrote:

MarketResearch wrote:We have seen some bad experience for stocks after the announcement regarding right issue.
The stock price is coming down drastically.
The best recent example is SMLL.
After the right issue it came down.
Normally(Not Always) the CSE is going with previous experience.
100% we can not say It will happened to SEYB.But Care fully.If it came down,it is difficult to go up.And it will take time go up.

Do you analysis yourself and make a wise decision.

Thanks.

SMLL is a special case. The price dropped dramatically from around 85 to 75 when peoples leasing sold 10% of their holding. Then news probably leaked of an announcement and the price shot back upto 90. I think it was helped there partly because last time they had rights, the share was trading at ridiculous price levels kind of like WAPO.

Then on the day of the announcement, retailers piled in. The insiders who had early access to the news or guessed started to 'sell on the announcement' which caused the price back down. IMHO the price of SMLL would stabilize around the 80-85 range.

SEYB is a different matter. The news does not seem to have leaked before the announcement, so it doesn't look like a bunch of people have collected to sell on the announcement. So I think that the price will stay within + or - 2 rupees from the current price.

Both SEYB.X and SEYB.N are oversold. So don't rush to sell your holding. At the same time. Don't rush to buy any shares either. Watch how it behaves for a few days and then make your decision.

Tubal,
The way SEYB has been responding ( going down) after the Dividend announcement and afterwards the positive Financial reports , am not sure whether the prices came down this much ( now it is lower than in november) due some leakage of this. It is good monitor as you said which way this goes withotu panicking. On one hand yes it is severally over sold.

Yes they both are oversold.
the rights price of 35/- for X is almost 10/- less than the current market price. It is very improbable that it will drop that low. Therefore the price looks attractive. At the current mkt price, the theoretical ex-rights price is 42.50/-

SEYB is a different matter. The news does not seem to have leaked before the announcement, so it doesn't look like a bunch of people have collected to sell on the announcement. So I think that the price will stay within + or - 2 rupees from the current price.

agree. within 1 week there are only 1.5 Mn shares traded. no one collect nor one dispose shares. market now trading at discount price for both N and X. probably, tomorrow we can see sudden dip lead by retailers.

anyway, my stars said, N will touch 150 end of this month. this is the same star told me ECL will touch 45. it told me to hold into SEYB. no guarantee. just a news, even though i can't understand, i will hold onto my SEYB. its advice worked to me.

anyway, I will not sell at loss. get the dividend is better than, sold at loss and regret later. since i'm having holding power, i will hold onto my SEYB.

xmart wrote:

SEYB is a different matter. The news does not seem to have leaked before the announcement, so it doesn't look like a bunch of people have collected to sell on the announcement. So I think that the price will stay within + or - 2 rupees from the current price.

agree. within 1 week there are only 1.5 Mn shares traded. no one collect nor one dispose shares. market now trading at discount price for both N and X. probably, tomorrow we can see sudden dip lead by retailers.

anyway, my stars said, N will touch 150 end of this month. this is the same star told me ECL will touch 45. it told me to hold into SEYB. no guarantee. just a news, even though i can't understand, i will hold onto my SEYB. its advice worked to me.

anyway, I will not sell at loss. get the dividend is better than, sold at loss and regret later. since i'm having holding power, i will hold onto my SEYB.

Dear xmart,
Based on the fundamentals, can it reach 150? ( i know you say its just a news).

Last yr, EPS is 4.83. Last Qtr EPS is 1.51 ( annualized 6.04)

Based on trailing EPS with PER of 15, price = 72.45
Based on forward EPS with PER of 15, price = 90.6

Don't you think SEYB.N is fairly valued even compared to the near future prospects? Of course it will have above average prospects in long run.

What do you think on above?

Disclosure: I also N with more than 10% loss.

I think "econ" is correct on this matter... This is a share of one of a leading bank of Sri Lanka. The bank is operating under a very talented set of people like other banks... And also it is a good bank... I think long/medium term investors will get the benefit of this RIGHT issue and ... those who panic will lose...
Don’t predict anything in the current market unless if you have the power to manipulate the market.
This is not 100% fundamental driven now... But strong and fundamentally good share investors will survive... Short term investors will have BIG gains+ Big Losses = (small profit or big losses)... Fundamentally good investors will have a good gain at the end of each year…
I STILL KNOW/BELIVE “SEYB” AS A VERY GOOD SHARE…..

dhamm,

I know that. but to valuate SEYB, better to use BFI sector PE. 150 is too optimistic. like in case of ECL to 45. but probably, there should be something. market always not driven by simple mathematics like PEx EPS= price...
there are several variables which drive the market. stick to fundamental and play some games safely. if you can play with fundamentals, it is nice, isn't it?

I will just hold on to SEYB and observe. Financials are good. It is also important to observe what the bank is doing these days are they selling shares. Banks like HNB, SAMP and SAMP negotiate large deals at higher level than the current level and their cash positions are strong these banks do not seem to be selling. HNB went for a large issue over ten years ago since then their cash position is strong. Observations in next two to three weeks will give a clear idea about the SEYB issue.

It is important to know whether the crossings take place at a higher level, same level or a lower level. I continue to observe large scale crossings these days DFCC, COMB, HNB and SAMP crossings were either higher level or at the same level. DFCC around 200, COMB at around 271, and SAMP around 400 and HNB at the same level and so on, now HNB it is going up. These crossings give an idea about the future trends.