TIME is running out for small shareholders to decide whether to take part in the HBOS rights issue, although the prospects on Friday when the shares closed at £2.78 looked less than appetising.
A smarter move might be to sell the nil-paid rights, currently trading at around 14p.
Last week, more than a million small shareholders should have received their prospectus, along with a personalised form of election reminding them of their hold
ings and outlining their options.
They are being given the right to buy additional shares for £2.75 each, which hardly looks a steal given its current trading price. The form of election will inform average shareholders that they have 374 shares, and can buy up to 149 shares for £409.75.
They can decide whether to subscribe for the full amount, for part or to participate without stumping up any further cash, known as tail swallowing, in which case the company will sell some of the rights in order to take up others.
Finally they can sell all the rights, or do nothing, and the rights expire on Friday, July 18.
However, investors could opt to sell their rights ahead of the rights issue by disposing of their nil-paid rights, and use whatever money they raise to buy additional shares in the market.
Seven Investment's Justin Urquhart Stewart said: "The market is very weak and banking shares could get weaker. They might as well take the money while they can."
Fraser Gardiner of Bell Lawrie added: "The value of the nil-paid rights will erode from here. But whether it is the right thing to do depends on your view of the future for this company."
Sounds expensiveMUSIC fans should ditch UK music festivals such as T in the Park and head to cheaper European alternatives this summer, according to Clydesdale Bank.
Clydesdale's new research revealed that the average cost of attending a music festival in the UK is £402. A European festival, however, sets music fans back an average of £380 – £22 cheaper than the UK.
Many UK music fans are realising they can combine their annual festival visits with a summer holiday and get a longer festival with better weather for less than it would cost at home.
Even taking into account additional travelling costs, the European festivals are still far better value than their UK counterparts, with festival goers benefiting from cheaper food and drink as well as lower ticket prices.
Scotland's T in the Park is the UK's most expensive festival, with fans paying £171 for two and a half days of music and four days of camping – an increase of £89 over the last five years and £31 in the last year alone.
By contrast, Slovenia's Exit Festival costs just £84 for nine days of camping.
Grow your savingsTHE Post Office has launched a one-year Growth bond paying 7.05%.
The bond, available in branches, online or by telephone, is open to anyone with a minimum investment of £500.
The Post Office also offers three and five-year fixed term bonds paying 6%.
New trackerJOHN Charcol has launched a two-year tracker mortgage which offers a rate 0.99% above the Bank of England base rate.
Borrowers can get up to 80% of a property's value, up to £999,999. The deal charges an arrangement fee of £995 and an application fee of £99.
President chosenTHE Faculty of Actuaries has named Ronnie Bowie as its new president.
He takes over from Stewart Ritchie, who stepped down after a two-year term.
The full article contains 603 words and appears in Scotland On Sunday newspaper.
