- Unlike a Rights Issues, there is capital "raised" by the Listed Firm
- The trading increases thus raising listing costs for the Listed Firm
- The costs of maintaining share registers increases
- The extra trading benefits the brokers who trade in & out for the shareholders!
- There is a valid point that some investors may not be able to buy the higher-priced shares but they are in a minority.
When Buffett’s Berkshire Hathaway (nyse: BRKA - news - people ) stock reached $1,300 in 1983, Buffett addressed and rebuffed the prospects for a stock split. “We want [shareholders] who think of themselves as business owners and invest in companies with the intention of staying a long time. And, we want those who keep their eyes focused on business results, not market prices,” he wrote in a letter to shareholders that year. Source: Forbes
Note that the current price is over $104,000 per share! Yes, that is over KES 7.25 Million per share!
If Berkshire Hathaway was in Kenya, the shareholders might riot in the streets!
Back to Kenya...
Barclays - They have never split their shares in Kenya but there is a chance they may do so. The majority shareholder does not trade their shares i.e. the share price is less of a concern than the profitability of BBK.
BAT - Unlikely at the moment. They prefer paying "good" dividends. The majority shareholder does not trade their shares i.e. the share price is less of a concern than the profitability of BAT.
E.A.Cables - The majority shareholder (Trans-Century) is an outfit that would probably take profits to re-invest in other businesses OR leverage their EAC holdings. Note that the price of EAC has fallen gradually (I told you so) to more reasonable levels. EA Cables has a bright future but the price reflects that future and more!
ICDCIC - The majority shareholder (Chris Kirubi) is a smart investor who IMHO probably take profits to re-invest in other businesses OR leverage his ICDCIC holdings. Note that the price of ICDCIC has fallen and IMHO will continue to fall to reflect the "truer" value. ICDCIC has a bright future but the price reflects that future and more!