On Friday the 8th of June, Kenya Airways (KQ) announced the results of their KES 21 billion rights issue. The announcement reported that the issue had received a 70% subscription implying that about KES 14 billion was raised. This news was not necessarily unexpected since there had been speculation that the issue was undersubscribed. In lieu of this the share price slipped from KES 16.30 on 21st May to KES 14.90 on 28th May to KES 14 yesterday. On Monday the share dipped below the initial rights issue price of KES 14 as it touched KES 13.95.
Though it may be a bit early to trend the performance of the share since the announcement, it is worthwhile to note how the share has been trading.
As we can see over the course of the week the share has been slipping. It has fallen from KES 14.80 on the 7th to KES 14.25 on the 8th to KES 14 on the 11th. This decline could be attributed to reduced investor demand for the stock due the fear of dilution.
The airline has announced that it will release its financial results for the 2011/2012 financial period tomorrow. We will be watching this counter to see whether the declining trend will continue and whether the financial results announcement will have a bearing on the share price.