Private Investor: Whats wrong with taking up my RBS rights?
As a small-time shareholder in Royal Bank of Scotland I will, I can confirm, be taking up my rights. They’re deeply discounted and, while I remain dead pessimistic about the financial sector, I don’t think the Royal Bank’s long-term prospects are so bad that I can ignore rights at about two-thirds of the prevailing share price. The one thing RBS boss Sir Fred Goodwin’s strategy of diversifying income streams around the world and across different businesses has done is to give one some hope that the group will pull through the present difficulties in the developed economies. Eventually. What the wisdom of paying out a dividend now when it all has to be recouped via the rights issue escapes me. Perhaps they had already announced the dividend and therefore were locked in to that decision. However, maybe that decision wasn’t such a wise one at the time. I say that because the credit crunch has been around for a year. How long it would last was, and still is, unknowable. It will only come t
