Indeed, had both not announced two very different sets of results to a rights issue over the course of the past two days, I wouldn’t have thought of it either.
A glance at the two share price charts reveals a few more similarities than one would expect – granted Lonmin’s shares are down just over 99% over the course of 2015, while Standard Chartered’s shares are only 46% lower, but there is at least an optical similarity in the timing of the peaks and troughs.
And, while Standard Chartered’s fall is only half that of Lonmin’s on a relative basis, when compared to the rest of the UK’s banking sector, it is significantly worse – Barclays is down only 8.8% from the beginning of January, Lloyds is 5.8% lower and HSBC is down 16%.
All of which makes sense when one considers how exposed both Lonmin and Standard Chartered are to the fortunes of emerging markets, and Asia in particular. But, if the results of the two rights issues are anything to go by, it is possible that the 2016 share price charts will look decidedly different.
While Standard Chartered’s $5.1bn rights issue saw around a 97% take up, Lonmin’s decidedly smaller $407m rights issue, which was done at a massive discount to the current share price, was only taken up by 70% of shareholders.
And, although current reports indicate that South Africa’s Public Investment Company is likely to step into the breach, the difference in sentiment is staggering. Standard Chartered investors would seem to have good, if not, great expectations for the future direction of Standard Chartered shares, and this despite it performing pretty poorly in comparison to its peers in last week’s bank stress tests, while Lonmin’s beleaguered shareholders seem to have a pretty bleak house view.
