another rbs rights issue? - would you risk it??

anna42hmr

well it appears following on from the problems at the moment (and the previous rights issue at £2 a share) it appears another one is going to be done at 65.5p a share to raise more capital (and whats not taken up by existing holders will be taken up by the treasury)

would you risk this?? i took up the £2 a share one earlier this year as it looked a great deal at the time (though less so now) at the moment if i was to sell my shares it would be at a great loss, however for the next few years i ahve no intent on selling, but an wondering wether the risk is worth it this time round, part of me thinks its too good to miss but am worried that if it ends up nationalised they wont be worth the paper they are written on

just looking for peoples opinions, it would only be a few hundred i will be asked for it if is the same as last time, but now there is a "no dividend" rule, i am wondering whats in it for me, at least if they were still playing dividends, over time they would pay themselves off for the extra but that wont be the case for a long while i assume

luckylizard

if it's true that RBS will be allowed to pay dividends again after one year, then i think there's reason to believe, over a 2-5yr timeframe, you'd make a decent return. possibly a very good one.

then again, if the housing market collapses and buy-to-let loans turn bad, RBS could end up being 100% nationalised.

my money's on the former.

lectureral

I am in the same boat - for me it will depend what the price does - at the moment RBS is 65p - so you can buy in the market for the same as the rights issue price. That would seem to mean that there is no point.

If the price goes up significantly then I might take the rights issue - but chances are the price would then fall because the shares would be worth less without the rights.

I am in for the long term and hope one day to see the price back to my purchase price but am resigned to it being 5 years or so.

Masomnia

It's probably worth thinking about. Historically the yeild has been very good, 14% at one point I believe. But do keep an eye on the market. The price was 65p at closing, unchanged from yesterday, so the new shares may turn out to be good if the price rises a little.

I shouldn't imagine the price will rise substantially until dividends are paid again. When/if that happens you could be in a very good postition.

I'll be reading this thread with interest myself, bought some RBS shares last week!

anna42hmr

thanks for the replies everyone,looking at the release, they have stated that they will be setting the offer out in a prospectus to be published late october and the offer is expected to close in november so i guess i have a few more weeks to see what the score is with the shares over the next couple of weeks

i wonder if the share ratio will be the same as last time (an offer of 11 shares for every 16 already owned) or whether it will be amended

pumpndump

All this rights issue has done is condemn RBS shares to hover around 65p until the date of the rights issue.

There is currently a rumour flying around that HSBC want to take over RBS. I do not believe this rumour, because in the USA, HSBC are in a spot of financial bother.

sabretoothtigger

First Ive heard of hsbc having any trouble overall, they had no worrys satisfying the government funding requirements

They didnt want anything to do with bb when offered without special help from government so rbs seems unlikely as its liabilities are big enough to tilt even their supertanker of a bank

I think the only chance of takeover or buy in is from foreign wealth funds and thats only if the market reaches a bottom and stabilises somewhere above that. Barclays is raising more money this way I think

napoleon

anna42hmr wrote: »

well it appears following on from the problems at the moment (and the previous rights issue at £2 a share) it appears another one is going to be done at 65.5p a share to raise more capital

They're having a laugh. What happened to the last £12 billion they raised in a rights issue a few months ago? and now they want even more. Hoho, they really are pulling our legs

pumpndump

sabretoothtigger wrote: »

First Ive heard of hsbc having any trouble overall,

Look at their American figures.

As I've said, I don't believe the takeover rumour.

sabretoothtigger

Whats their american bank, I thought only rbs and barclays were quoted or eligable to take part in usa funding deal

Crapula_2

pumpndump wrote: »

Look at their American figures.

As I've said, I don't believe the takeover rumour.

Yeah I've seen all their ratings are terrible in the USA.

I also read/heard that the USA accounts for half their net profit.. or was it pre tax profit. does it make a differencee anyway? bah it's late and I wasn't paying attention. Might as well ignore this bit then.

The ratings are pish for sure though.

editagain: well having looked at their interim report i can't imagine who or what gave me the idea in the second paragraph.