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NDB trades below rights issue price of 105 on last day for subscription

October 4, 2018 (LBO) - Colombo Stock Exchange (CSE) listed National Development Bank (NDB) traded at Rs104 per share before noon on the last day for acceptance and payment of its rights issue. NDB is attempting to raise funds via a rights issue to bolster the capital of the bank. The bank is trying to raise over Rs6bn through a heavily discounted rights issue in comparison to their net asset value of close to Rs200/share.  The last date for rights holders to accept and pay for shares of NDB at Rs105/share is  today, October 4th. Analysts say State owned entities, which own close to 30% of the shares of the bank, are likely to subscribe to the rights even if the issue price is above market. For other existing shareholders, the uptake of the rights is much less certain. NDB shares have been caught in a downdraft with the rest of the CSE. Foreign selling has persisted in many emerging markets as a result of interest rate increases and quantitative tightening in the United States. The CSE All Share Price Index is down close to 10% for the year 2018, while the S&P SL 20 index is down close to 20%.
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