What are Stock Rights? MBT Stock Rights Offering Options

What are stock rights and what should you do about Metrobank, (MBT) stock rights offering?

There has been a buzz lately since Metrobank (MBT) announced their Stock Rights Offering.

Some people panicked as they assumed MBT stock price will go down really bad because of the SRO.

To discuss the topic further, I decided to make this post and tackle the options we have for this, especially MBT stockholders.

If you are holding shares of MBT right now, this post may help you decide what to do with the SRO.

What are Stock Rights?

Stock Rights are offered to existing shareholders / stockholders that give them the rights to buy additional shares usually at a discount at a stated date or time.

Stock rights are also opportunity to current shareholders to maintain their proportionate status in the company.

Why companies offer Stock Rights?

Companies issue stock rights to raise capital for business expansion, for paying down debts or for reasonable growth strategy.

In short, to raise more money needed for something very important in their business right now.

In the case of Metrobank, it expects to raise money of approximately 32 Billion to fund their medium-term expansion.

Metrobank plans to sell around 435.37 million new common shares through stock rights offering.

Metrobank Stock Rights Offer Information:

metrobank stock rights offering

Each MBT shareholder is entitled to subscribe to 1 Right Share for every 6.3045 common shares held as of Record Date at the offer price of P73.50 per Rights Share.

  • Assuming you have 200 MBT shares right now. How many shares can you buy following the SRO?

200/6.3045 = 31 shares (use 30 because we follow MBT Boardlot)

That means you can buy 30 shares worth P73.50/share.

What should you do with MBT Stock Rights Offer?

what are stock rights metrobank stock rights offering

Stock price usually decline when a company issued rights. As existing MBT stockholder, you have 3 options:

  1. If you have available cash, buy the shares you can buy following the stock rights offer. In the sample above, buy 30 shares. This option will let you take the opportunity the SRO is giving existing stockholders.
  2. If you don鈥檛 have cash right now, sell 50% of your MBT stocks before the SRO ex-date, and use the money you received from the sale to buy shares at the start of the SRO.
  3. Ignore the offer and let it pass. You may lose some when MBT price declines after the offer but you still have shares, that is what important. You may lost an opportunity but tomorrow is another day.

Metrobank is a very strong company with impressive financial statements.

Remember, MBT is one of the Top 3 Banks in the Philippines.

It has an excellent management team.

You are a long term investor of Metrobank. And you have shares of it. Keep your shares coz MBT will keep it up.

Want to know our Stock Market Strategy? These are our Picks:

About Fehl Dungo

Founder of DailyPik, trusted fund manager and investor. I have a Degree in Accountancy and a background in Finance. I analyze stocks everyday. COPY my Portfolio on eToro Connect with me on Facebook

41 thoughts on “What are Stock Rights? MBT Stock Rights Offering Options”

  1. Miss Fehl, you’re great! I have found your site a month ago and it is really good. I started investing last May 2016 with BPI…i did not find BPI in your Magic 10…is it okay to continue or follow your recommendations?

    Reply
    • As for SRO, for as long as you’re entitled (following the OFFER), you can buy those shares. I only mentioned the boardlot because it’s how we always buy…you know avoiding ‘gansal’ from our port..

      Reply
  2. Just wanted to share that Reuters have a very good site for stock research. Just wanted to share this as I like how this site is being sincere. This is a good read if you really wanted to study your stocks.

    Btw, I use both ColFinancial and FirstMetroSec and have to say that FirstMetroSec have better research tools. I just thought you should know. In fairness, ColFinancial publish better tips.

    Keep this site updated. I will bookmark this from now on.

    Reply
    • It’s cool to hear user’s experiences about other brokers like MetroSec. Wealthsec is good too. I like their research and reports

      Reply
  3. hi fehl, nakabili ko ng 7 shares, kelan sya magrereflect sa account ko? or san na mapupunta yun
    have seen east west will also do the same this april

    regards

    Reply
  4. Hi Fhel, I found your blog very informative. THANK YOU and KEEP IT UP! I’m new to blogging and would consider myself still a newbie to the Stock Market world.

    I have a question regarding the SRO of MBT. I was entitled to buy 41 shares and I did subscribed. It was already debited just last night on my COL Financial account since I keep on monitoring (my first time). My concern is that my MBT shares remained the same even though I bought additional 41 shares. Where did it go? 馃檨 Do I have to wait for 24 hours for it to be added on my MBT shares? Thank you very much for your advise. GOD BLESS!

    Reply
  5. I’ve been searching for this question but I found nothing, so here I’m gonna ask this, If I don’t have any stocks from MBT, like in my case, I just started few months ago and MBT was not in my trading list, but since MBT’s price is assumed to dive down in a few weeks from now, wer gonna buy our shares ofcourse. So are we new comers are allowed to buy shares as well? Or it is only allowed to those who are stocks holder of MBT already?

    Reply
  6. Hi,

    When does the purchased stock rights usually take effect after the investor submitted the signed notice of purchase? I am using BPI Trade and then they asked us to print the document and sign the copy for the purchase. I submitted it last Monday and the price was deducted on my BPI Trade cash but the number of shares is not yet reflected on my portfolio. Is that the expected? When will be the purchased shares be reflected? Is it on the 23rd?

    Thanks Ms. Fehl. I am totally learning a lot from you! God bless!

    Reply
    • Hi. I’m using COL Financial and the shares were not yet added after I subscribed at my Stock Rights entitlement. When I signed, it said that debit and processing will be done on the 23rd. Once it was processed, I will have a receipt and the shares will also reflect in my account. That date will be within the listing date (23-27). Shares will reflect on the listing scheduled by MBT and COL. I think with BPI Trade, it’s the same, cash will be deducted from your buying power but everything will be credited on your account once you have the receipt. God bless!

      Reply
      • Hi Fehl, I have already click on the “subscribe” button to do purchase of the stock rights and I saw that there was an acknowledgment saying that it was processed. Does that mean it’s done already and I just have to wait from Mar 23-27 until it gets reflected in my COL account? Or do I need to do more? ‘Coz right now I do not see it reflecting yet or adding any stocks to my MBT. Any advice on this please. Thanks!

        Reply
  7. Hi Miss Fehl, thanks for the information that you generously give for free in your site.

    May question po ako, i receive an email from COL na entitled daw ako sa MBT SRO, (bumili kasi ako ng 20 Shares february p un. ) 3 shares daw ang puede, mabibili ko ba yun or hindi? Kasi po di ba minimum board lot is 10, thank you.

    Reply
  8. hi Ms Fehl good morning may question lang po ako saan po makikita sa COL page ang SRO?
    kailan po ba ang start ng pag buy stock rights?
    thank u in advance sa reply..

    Reply
  9. MBT market price has been going down these past few days. Seems like a good time to “stock up” for the upcoming SRO :).

    Reply
  10. Hi Ms. Fehl,

    Is this available for us in abroad? Like me I have COL Financial Account, but don’t have any MetroBank Account. Still have available fund to buy, however in the announcement made by MBT, Deposit Participant signatory, is it needed to be actually present in PI? Or can we send like signatory in emails?

    Please advice.

    Thank you again and God Bless!

    AJ

    Reply
    • If you have existing MBT stocks, yes. The forms you will need will be supplied by your broker. If you’re using COL Financial, the details can be seen in your dashboard once SRO starts. Very easy and accessible 馃檪

      Reply
  11. I am a newbie here ms. fehl, you inspire us really–simple, practical and straight -to- the point lessons about the stock market. Thank you,”Kudos” !

    Reply
  12. Great insight this answers my question on my MTB possession, whats more interesting is you provide us with options. Which normally for paid financial analyst DAW…Great article I wish other experts/masters/gurus will follow. This is the true way to Financial FREEdom.

    Cheers Fehl and happy investing everyone.

    Reply
  13. I really like your spirit in sharing an important information. You nailed it Fehl. This blog breaks the anxious of all share holders/ stock holders. Thank you very much Fehl.

    Reply

Leave a Comment:

More in Stock Market, Stock Update
rlc stock price profit stock market philippines
RLC Stock Price, Profit 鈥 Gained 10.5% in less than 4 months

Close