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UOB Preference Shares

Following the lead of DBS and OCBC, United Overseas Bank Limited (UOB) might be the third local bank to issue their own UOB preference shares during this period of financial turmoil.

Newspaper reports indicated that the yield might be 5.05%, which is slightly lower than the 5.1% offered by OCBC recently.

UOB has confirmed that they are currently considering issuing the preference shares and had already submitted a listing application to The Singapore Exchange Securities Trading Limited.

Once the necessary approval has been obtained, more details will be posted here of the UOB preference share offer.

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15 comments
Jessica says a couple of years ago

If UOB decided to call back the preference share on 15 Sept 2013, are we still entitle to the dividend as dividend paid out date is also 15 Sept 2013 ?

Reply
    Martin Lee says a couple of years ago

    Dear Jessica,

    I’m not 100% sure but I think you should.

    Reply
cheekhiaw says 5 years ago

The DBS 6% NCPS is due for interest rate re-set in June 2011 and therefore will NO MORE be paying 6% by then. Pls confirm such details with broker/bank before buying…

Reply
Anne says 5 years ago

Dear Lioninvestor,
Kudos to you for this wonderful site which I found in searching for more details on DBS Bk 6% NCPS (fyi, I couldn’t find any info on this on DBS website). Thanks for the clear & concise desc on pref shares.
I am looking to buy some pref share for good steady yield. DBS Bk 6% NCPS 10 has one of the highest yield and looking at current list pr, looks most attractive. However, since it’s drop in May2010, it seem to hover around $103.7-8 although those from OCBC has been rising. Could it be because of higher chance of redemption since this was issued abt 10years ago? or maybe investors are wary of DBS’s performance? What’s your take? (I have learnt to be wary when something looks gd, hence would appreciate a 2nd opinion in case there is some high risk factor priced in.) Thx!

Reply
    lioninvestor says 5 years ago

    Hi Anne,

    There was a time when the preference shares were trading at huge discounts to their par value and nobody wanted them (end 2008). Note that if you buy now, you will be paying a slight premium and thus your yield would actually be lower (not 6%). Remember also that if when the shares get redeemed, it would be at par value.

    The DBS Bk 6% NCPS 10 (D14) was issued quite long ago. Best to get your stock broker to check for you the details – dividend policy, buy-back clause, etc.

    Without looking into the details, you can’t really compare them.

    Reply
JJ says 5 years ago

Hi
I would like to know – how to start?
Open an account with bank? The stock exchange ? or just directly purchase from personal internet banking ? Any admin fee ? Penalty when redeem early ? Any risk than Fixed deposit ?
Which website to learn the basic knowledge before purchase.
Thanks

Reply
    lioninvestor says 5 years ago

    Hi JJ,

    Have you bought normal shares before?

    The procedure is exactly the same as buying shares. You can drop by the branch of any stock broking firm and they can show you the steps.

    There is no redemption date. If you need to redeem, you sell it on the open market (at whatever the market price is).

    Reply
JJ says 5 years ago

Hi
How can I start to buy preference share?
Go into internet search ? How can compare which bank offers better return? What is the minimum amount to purchase?
Thanks

Reply
    lioninvestor says 5 years ago

    Hi JJ,

    Preference shares are listed on the stock exchange. Look for the name of the bank. eg DBS Bk 6% NCPS 10

    The 10 at the end means it’s traded in lots of 10 shares. At a price of around $104, it will cost about $1040 per lot. If a dividend of 6% is paid, you can calculate a rough yield as 60/1040.

    Reply
SWN says 6 years ago

Can anyone confirm whether preference shareholders can attend the AGM of the company just like ordinary shareholders?

Reply
helen says 6 years ago

Hi,
Just read that the UOB preference shares may be redeemed on 15th Sept 2013 or 2018. Does that mean that unlike the OCBC preference shares which will only be redeemed in 2018, the UOB ones do not have the guarantee of only being redeemed in 2018?
Thanx,
Helen

Reply
    lioninvestor says 6 years ago

    Hi Helen,

    Are you concerned about the early redemption? Note that the bank has the right but not the obligation to redeem.

    Reply
      helen says 6 years ago

      Hi,
      Yes, I’m concerned abt the early redemption as the interest paid on the shares will drop. If I’ve bought the shares at more than
      $100 per lot, the price will definitely drop when it is closer the redemption date.

      PS
      What’s the difference between the OCBC 5.1% Preference shares and the OCC5.1% shares,
      Regards n thanks for your help.
      Helen

      Reply
        lioninvestor says 6 years ago

        Whether the redemption takes place will depend on current interest rates at that time as well as the bank’s capital requirements. It is hard to say.

        You can read this article to further understand how the pricing works:

        http://www.martinlee.sg/preference-shares/

        The OCBC 5.1 and OCC 5.1 are two different preference shares issues (OCC is also issued by OCBC but via another entity OCC). So their T & C might be different. You can get your stock broker to dig out the details for it.

        Reply
Tan Yow Kheng says 7 years ago

Dear Officer-in-charge,

Can I know when the 5% Preference share dividend is to be paid? I bought on 15 Sep 08 and it should be 6 months now.
If you have any queries, please email me at the above addr.

Best Regards

Reply
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