Overseas Chinese Banking Corporation (OCBC Bank)

[felixleong]

In regards to the Wing Hang acquisition, I've got a feeling that they might do placement to institutional investors instead of a rights issue. The Lee family owns close to 30% of OCBC, I really can't imagine them putting more $$ into this company. They seem more like the kind to sit on their investment and slowly collect the returns.

Well, I am definitely against placement to 3rd party investor, for 2 reasons :

1. Placement usually is done with a substantial discount to market price. So why give the discount or rather benefits to an outsider rather than the faithful shareholders.

2. If they decide to go for right issue, it would not be very heavy handed type one, may be 1 right for for every 5 shares ? ( Say at $8 ? )

Assume you have 1 lot of OCBC at hand, to subscribe for 200 shares at say $8 will require you to cough out another $1600 which I believe would not be very difficult for ordinary retail investor.

If you do not like to take up the right ?
Just sell the rights at the open market for a profit lor !
Some one else would be happy to pick it up.

Ya I agree that rights would be better for retail investors. Looking at the recent trend, like CIMB which raised 1.1bil in jan using placement, I just felt higher probability of OCBC doing placement instead of rights. Maybe that is also why OCBC dropped so much this year.