Hot on the heel of DBS, OCBC has announced that they will be issuing as much as $1.5 billion dollars worth of preference shares.
However, unlike DBS, OCBC’s offer will be open to retail investors. Back in 2003, it had done the same with the shares having a dividend yield of 4.2%.
The question to ponder is, “why are the banks raising capital at this time?”
At the end of March, OCBC had a healthy tier one capital ratio of 12.2%, DBS had 9.2% while UOB had 9.9%. The regulatory requirement for tier one capital is only 6%.
Perhaps they see a way to put the raised capital to some good use.
6 comments
little says:
May 28, 2008 at 12:16 am (UTC 8)
Hi, I’m a newbie to investment. How/where do we apply for these preference shares or do I have to own an OCBC stock first?
lioninvestor says:
May 28, 2008 at 6:00 pm (UTC 8)
Hi Little,
If they make it available to retail investors, then it should be through methods similar to IPOs.
ie. ATM applications or placement through your brokers.
I’ll keep a lookout and update the site accordingly.
green says:
August 15, 2008 at 9:12 am (UTC 8)
Hi, when is the period/deadline for atm applications?
lioninvestor says:
August 15, 2008 at 2:44 pm (UTC 8)
Hi Green,
You can refer to this post for details of the latest offering.
http://www.martinlee.sg/ocbc-to-raise-preference-shares-again/
Calvin says:
August 25, 2008 at 6:36 pm (UTC 8)
where is the secondary market for trading this preference shares? SGX?
lioninvestor says:
August 25, 2008 at 10:43 pm (UTC 8)
Hi Calvin,
Yes, you are right. It’s on SGX.