HBOS rights issue concerns June 23rd, 2008
HBOS’s £4bn rights issue looks under pressure as once again the shares dipped below the 275p issue price. UBS has raised concerns that the Banks mortgage arrears will increase over the second half of the year. Also a US hedge fund has declared its short position in the stock, showing that it has bet that the share price will fall.
The rights issue is underwritten and is going ahead whatever the market price, however the latest news doesn’t bode well for existing investors, many of whom are small, private shareholders that received the shares on demutualisation. Whether to take up the rights issue really is a close call but there doesn’t look to be any value in it in the short term.
June 27th, 2008 at 12:10 pm
I’m not convinced there is any benefit in taking up the rights issue as there will be opportunities to buy the stocks at less than the issue price, if you want to. The share price doesn’t look like it will head north any time soon.