lloyds right issue

jabar2

Member
50 0
hi there. it's my first post here and i'm quite new to share dealing. u probably know already about the right issue. today is the ex date and the price of shares droped 25%. i invested almost my hole capital into lloyds and i'm not sore what will happen now. i'm offered shares for half today's price. should i buy them and then wait? what can happen to lloyds share price? can it go further down after the pay date? what is the worst case scenario? i haven't got any experience so i hope someone will give me some advise. cheers
 

foredog

Experienced member
1,879 314
If it was a 1 for 1 then for every lloyds you held you'll also get 1 lloyds nil paid, which will begin trading a the difference between the lloyds price and the call(38p?)

What you can do is

Pay 38p for all the rights...maintaining your % holding

Sell a certain amount to pay for the the rest of the nil paids

Do nothing and lloyds will sell your rights in the market and you will recieve and difference between the call (38?) and the market price of np when they go fully paid

In theory the shares should recover after the rights issue as the balance sheet should be more secure...that's what the bosses of lloyds are hoping, but will it be like that, who knows.

What should you do? up to you.

But next time don't put all your eggs in one basket, just in case!!!
 
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theSheik

Active member
163 20
you could hold out for the rump placing

if you don't take up the initial offer (57pc lower than Friday's closing price (around 38.4 p/s?)), you can wait for the open market sell

proceeds from that sale are distributed to shareholders (I take it your owning stoke as opposed to SB) who didn't take up the original offer
 

cristoff

Junior member
10 0
a lot of the posters on iii seem to think in the next 12-18 months lloy will be close to 1.50

Unless something terrible happens, I dont see why it wont be over a pound by then. If I were you, I would be tempted to hold my position for 6 months, then look again.

Once confidence returns to the banking sector and banking shares fall out of state ownership the sp's will increase.

The difficult part for an investor will be weathering the storm until then.
 

Halfbutt

Member
56 0
Hi

Ive been reletively sucessful trading banking shares but have made some appauling decisions that have cost me significant profit. This week sold ALBK at 1.54 ( made 67 point but the rest is history) and a poor decision on Barclays , cost me a couple of £K in profit.

Im now attracted to LLoy and RBS but could someone explain a bit more fully Rights issue
Do you mean we may get a retractment back to 38p . Does a rights issue control a stock price etc.

what peoples view on RBS also, its heading for lower end of trend but is displaying a "flag" that ive interpreted a bearish.
 

bootlegelf

Newbie
7 0
Lloyds

I think Lloyds is a good bet. I have bought at 63p, they will be first bank to pay back government completely i believe. Target price from Deutche bank is 1 pound. Well worth a few weeks trading...poss even long term.
 

raysor

Established member
508 12
Well the Lloyds issue was'nt a Rights Issue. It was a placing and compensatory open offer! All adds up to the same thing, I admit.
 

jabar2

Member
50 0
"Lloyds Banking shares were being re-weighted for Monday to account for its recent capital raising."

i saw that comment today at reuters. i'm not the best in english and don't quite understand that sentense. could someone explain it to me with other words please. cheers
 

raysor

Established member
508 12
presumably, because it swapped the Govt's preference shares for ordinary shares the capitalisation increased and therefore its weighting (in the FTSE index?) altered??
Apart from that I don't know.
Other possibilities are the shift of the asset/liability ratio could be referred to as a re-weighting. Or analysts could be moving their weight assessment, for example underweight to overweight.
I think in this case it is the index weighting.
This is the problem with the financial reports; having read several from a Google search, they all just seem to copy one another word for word with no real explanation.
 
Last edited:

foredog

Experienced member
1,879 314
Basically since there's more shares in issue then all the tracker funds etc have to buy more shares to make sure that they still have the right % for the FTSE
 

foredog

Experienced member
1,879 314
Lloy re weighted up so funds need to buy so should see them rally...but....most funds would already be positioned for this so Monday probably nothing
 

townage

Newbie
9 0
Hopefully all the banls will get dragged up once the ftse starts to climb bk out of the 4300 level it has got stuck in again, lloyds and rbs still seem like a good punt
 
 
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