RBS rights issue?

Question

It allows you to buy 11 for every 18 shares you own. Do you think it is a good deal? I do not have RBS shares yet, should I buy it now? Geniune advise only, please.

Answer 1

Hi,

Option is over, rights had to be in by 6th June.

Nothing you can do now.

Answer 2

The issue was 95% taken up, meaning that for a short period there may be some underwriters selling stock and depressing the price.  It could be a good time to buy, but on the other hand the prospects for the UK economy are not good and keep getting worse as we progress through 2008.

RBS is not as exposed to property in the UK as other banks such as HBOS.  However, it will be affected by the general possibility of stagflation and economic demise.

If you do decide to buy, hold some money back in case there is another rights issue in 2 years time!