Quote:
Originally Posted by riskreturn
I do not know yet concerning whether and to what extent the offer would be over-subscribed, particularly because I do not yet know the offer volunme and the offer projections as per offer Prospectus. However, I wish to point out that SEC rule has since outlawed preferential allotment. Second, the statement that "Crusader, for the most part, since it has been placed on TS has been on a BID,.." is a bit an over-statement as it was not until past few days that the stock started to be on a net bid. Hitherto (i.e., for the most part), it used to be on a net offer. Whether one should be "stockpiling" by buying from the secondary market at the TS price of 7.50 Naira is a issue best left for individual investors. But I feel that, by March 2009 (i.e., a year from now and if the present stock market situation still prevails), the stock would not likely trade above around 10 Naira. For a subscriber at N5, this would translate to a gain of 100% while, for a secondary market buyer @ TS price of 7.50 Naira, it would translate to 33% per year.
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They want to raise N10 billion from the market. Going by the way Crusader Insurance has been trading, they have been trading on the most part below the general stock exchange return rate for the past 7 - 9 months. But I remember their PO at 1.30K in October 2006. There is no gainsaying the fact that they have sound fundamentals and at the current price they are going at a PE of about 30, which is still below the industry average. There has been intermittent offers and bids since it went on TS.
I am interested on the indices you used to arrive at a value of just N10 going forward by one year.
Thanks,
The Knight of Delta.