Leave a Comment:
12 comments
I got some questions on this statement – “fixed dividend of 5.05% p.a. payable semi-annually on 15 Mar and 15 Sep each year”
(1) How is the 5.05% payout calculated ? Is it 5.05% of the issue price of $100 ? The exisiting traded price during the semi-annual payout ?
(2) Since there are 2 payouts in a year, each payout will be 2.525% ?
ReplyPreference shares are ok as long as the company doesn’t go bankrupt.
Just that there isn’t really a maturity date for you to exit should you want to. You have to either sell it on the secondary market, or depend on the bank to redeem from you (at their wishes).
ReplyHow about the OCBC preference shares which were issued recently by OCBC bank that retail investors can buy via the ATM? Is that CAPITAL PROTECTED? guaranteed?
ReplyUOB preference shares, again is not capital protected or guarantee,you may lose part of your capitals.
ReplyHi Jace,
A CDP account is required to hold the shares.
You can go down to their office or alternatively, open it via any of the brokerage firms in Singapore.
The atm steps can be found in Appendix G of the offer information statement.
http://www.martinlee.sg/uploads/uob-preference-shares-prospectus.pdf
ReplyHi, how can we buy the preference shares under ATM offer ( open for public)?
We need to open any account with CDB first? and any guide line?
ReplyHi Marc,
A different class of share is usually used to represent different rights (voting, dividends, etc).
As to why UOB uses E instead of B, I’m not exactly sure. Perhaps they already have Class B, C and D out there.
ReplyHi Lion Investor,
I noticed that the UOB preference shares are termed Class E shares. Can you enlighten me as to what this actually means?
Hope to hear from you soon. Thanks!
Marc
ReplyHi Alvin,
It’s under a one tier system so there is no tax at your end. The recent tranche by OCBC has a slightly different yield.
http://www.martinlee.sg/ocbc-to-raise-preference-shares-again/
Hi Glorious Citizen,
Thanks for your feedback.
The only chance the dividend is not paid is either
1) the bank does not pay dividend to its ordinary shareholders; or
2) the bank goes under.
There’s just too many such preference shares of late. I hope this won’t turn out to be another “sub prime crisis” where banks sell a product (“promising” high interest rate) to retail investors and they cannot realize the promised returns…
By the way, I enjoyed reading your blog! Very informational! Thanks!
Replywhat are the differences between OCBC and UOB PS?
Is UOB’s PS tax exempted?
Reply