«The big beauty brands will have to work harder to maintain the market because it's their market to lose and if these major fashion players nibble away at the edges, it has
a diluting effect on the market share these cosmetic companies have,» Saunders added.
In the case of a rights issue, where the issuing company is creating new shares and
diluting the existing share holders share of equity, the
effect on the share price will depend
on the reason for raising funds and the
markets perception of future returns arising from how the company puts the new funds to use.