StanChart sets rights issue price at Sh165.45

Standard Chartered Bank has set its rights issue price at Sh165.45 — representing a 39 per cent discount on Thursday's closing price, as it announced a 21 per cent increase in profits.

The bank is seeking Sh2.5 billion from its shareholders to help it purchase the custody service business from Barclays Bank of Kenya.

Its pre-tax profit grew to Sh4.1 billion in the six months to June 2010, compared to Sh3.3 billion in the same period last year. It didn’t give details on the profit drivers.

Standard Chartered hopes its profit growth will help charm its shareholders to take up the rights, which will see investors get one share for every 18 held.

This comes at a time when Kenya Commercial Bank’s rights issue yielded Sh12.4 billion against a target of Sh15 billion.

Analysts expect the Standard Chartered rights to be fully subscribed since its much smaller.

“The Standard Chartered offer is much smaller, and the bigger discount will ensure that investors take their rights up fully,” said one investment analyst.