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Today Straits Times report that 2 OCBC preference shares may be recalled by OCBC next month. I call the OCBC bank – Mr. Chin, and told him why the information was not provided in the SGX website ? and if the news was not reported. how can the investors know about it ? He can not give me the good answer.
jasonongsc ( Date: 28-Jul-2008 16:06) Posted:
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Anybody know the reason why OCBC is issuing the preference shares?
Why bother about this one. For me, if I wanna invest 20k, I will just buy 5 lots of SPH at current price with yield > 5-7% anytime. Don forget that banks are in the highest risk category for current sub-prime crisis as no one knows the extend of its losses and outcome. Just my view....
des_khor ( Date: 10-Jun-2008 10:19) Posted:
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It all boils down to weighing your risks.
Top on my list on risk evaluation is who the issuer is. In this case its OCBC. They have, at this time, three other non convertible preference shares (NCPS) listed on SGX....4.2% NCPS, 4.5% NCPS, 3.93% NCPS. These NCPS were issued in 2003 and 2005. Since the issuance, there has not been any default on the divident. So, it seems quite safe to me.
As for liquidity (cos its up to OCBC to decide on the recall), it you need your money back, you can always sell it in the open market.
So, all things considered, if you want to park some of your funds that gives you a very high probability of 5.1% returns, this is not too bad an option.
des_khor ( Date: 11-Jun-2008 00:00) Posted:
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des_khor ( Date: 10-Jun-2008 12:09) Posted:
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It is good that the last week edition of the Sunday Times and a few recent articles in Business Times gave readers a better understanding of what are preference shares and its attendant risk/reward. Many people may unknowingly think preference shares are like fixed deposits which the articles sought to correct. Those who missed the papers might want to refer back to it for it gave good detailed information on preference share issues.
I will invest only unless it's pay fixed and confirmed 5.1% pa . It's so simple the bank pocket 1b without promising !!
esmond ( Date: 10-Jun-2008 11:39) Posted:
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des_khor ( Date: 10-Jun-2008 10:19) Posted:
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0236 GMT [Dow Jones] STOCK CALL: OCBC's (O39.SG) S$1 billion preference
share sale exposes retail investors to a complex security that doesn't
pay enough to offset inflation, says Morgan Stanley. Exercise, which
offers annual dividend rate of 5.1%, comprises up to 9.5 million
placement shares, 500,000 shares for public. While bank says dividend
rate higher than current yields for 10-year Singapore government bonds
and SGD fixed deposit rates, Morgan Stanley says OCBC doesn't seem to
have priced in higher inflation, recent bond market movements; "it
exposes retail investors to a complex security whose price is variable
and determined by capital markets. These securities are not and should
not be compared to fixed deposits, which are implicitly guaranteed by
the MAS, of much shorter tenor and vastly more liquid inter alia."
Keeps Underweight call, S$7.50 target. Stock off 0.9% at S$8.59. (FKH)
agesis ( Date: 02-Jun-2008 18:07) Posted:
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Application for pref shares opened this morning and closed within 15 min. After OCBC has assessed the response to the application, they may (or may not ) open it again.
You need to check with your broker/banker if he managed to submit your application for you.
Pref share value is $100 per share. Min application is $20K (or 200 shares) and in $10K (100 shares) lots thereafter. You will be able to trade these shares in the SGX.. Currently lot size still not certain.....but guess it will be 50 or 100 shares.
Interest will be 5.1%....and this is fixed perpetually. OCBC can call back the shares after 5 years.
Sporeguy ( Date: 02-Jun-2008 11:09) Posted:
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