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25-03-2013, 09:22 PM
My own experience with trading with rights issue have been mixed.
Rem around 10 yrs back, some companies have tax credits to distribute and they were simultaneously doing a rights issue for investors to subscribe using their 'bonus' dividends. I bought into some of these companies at that time - blindly at times.
Some turned out fine while others not so well. So MW is correct that the assessment of the quality of the company and the reasons for the rights issue have to be analysed. For me the winners were those with strong fundamentals including some REITs.
Rem around 10 yrs back, some companies have tax credits to distribute and they were simultaneously doing a rights issue for investors to subscribe using their 'bonus' dividends. I bought into some of these companies at that time - blindly at times.
Some turned out fine while others not so well. So MW is correct that the assessment of the quality of the company and the reasons for the rights issue have to be analysed. For me the winners were those with strong fundamentals including some REITs.