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+--- Thread: CROREPATI TO LAKHPATI IN A MINUTE (/showthread.php?tid=3187)
CROREPATI TO LAKHPATI IN A MINUTE - anum - 04-25-2006
It is often claimed and I have no doubt over that that the Government is very serious in protecting the investors particularly the small savers. One often reads in newspapers that the Security & Exchange Commission of Pakistan (SECP) has taken so and so step to save the stock exchange small holdings. However, as a lay man, my average common sense does not understand many things. I admit my illiteracy and lower knowledge but question which puzzles me is of simple common sense and simple arithmetic.
An Industrial & Commercial Leasing company of Karachi has issued Letters of Rights to its shoareholders. I have been offered to subscribe for 300 shares @ Rs. 10/- per share. I am a real domestic saver. I have from my kitchen in months saved a sum of Rs. 3000. I am very serious to invest this amount in some secure security. Government wishes common man like me to come toward towards Stock Exchange rather than blocking the money in gold or real estate which according to economists is of no use to the nation. Now if I accept this offer I would need to deposit Rs. 3000/-. But at the same time I also know that within one single minute of my depositing the cash with the Bank, repeat exactly within one minute, my investment of Rs. 3000 would become net Rs. 1500 reason being that the companyâs present share market price is Rs. 4.95. The option of course available with me is to buy these 300 shares from the open market at a total Rs. 1500 but what puzzles me is how the authorities give permission to companies to get further money from the public in the name of further investment or under the label of raising the capital of the company at double the cost of prevailing market price. Do these authorities like SEP before giving such permissions for taking further money from the public keep in view the performance of such companies with whom the 50% or more of earlier investment of public had already gone into drain.
I am not critical to the company but my question is a logical one and sensible. I wonder if any wise reader could enlighten this common citizen.
- Muhammad Adnan Arshad - 04-27-2006
it is a good offer, indeed by ANUM!