Unlike the recent rights issue for LMIR, there is little to be gained from selling units in K-REIT and buying the rights. The former so far touched a low of 88c while the latter, a low of 2.4c.
Buying the rights at 2.4c would mean a total price of 87.4c per unit when they are converted into regular units.
In my blog post of 18 Oct, I said that "given my very small position in K-REIT, I will most probably subscribe to the rights issue. If I were not invested in the first instance, I would not bother buying in now to gain exposure."
By a stroke of luck, any potential investor who took my musings to heart would be happier today.
Why do I say this? Read the relevant blog post here:
K-REIT: 17 for 20 rights issue.
For anyone who wants to invest in K-REIT, buying into K-REIT now at 88c or even 88.5c is a better proposition than buying at 93c, the low of the morning of 18 Oct to be entitled to the rights. That would have worked out to an effective unit price of 93c x 20 + 85c x 17 /37 = 89.32c, post rights.
Of course, buying the rights now at 2.4c or even 2.5c would be an even better proposition as this would mean effective unit prices of 87.4c or 87.5c. However, this option is probably sensible only to people with deeper pockets or people who are with Standard Chartered's brokerage which does not charge a minimum transaction fee.
Not all rights issues are created equal, for sure.