Tuesday, August 19, 2014

OCBC rights issue (Part 2)

I was thinking whether there's a way to make the best out of this rights issue...seems bleak.

For those who haven't read, do read my first post on this rights exercise: OCBC rights issue (Part 1) first.

I thought of a few ways. Let's just assume that the buy in price is $10.20, just to make a comparison. Commission is not included in all calculations, unless otherwise stated. Theoretical ex rights price (TERP) based on $10.20 is $9.92


1. Buy in at 1 lot at $10.20. You'll be entitled 125 rights shares. You'll have a total of 1125 shares. Apply for 875 excess right shares at $7.65 to round up to 1 full lot.

Average price per share: $8.93

Advantages: You reap the maximum number of odd lots need to top up to 1 round lot, just by buying 1 lot of mother shares before XR.

Disadvantages: A lot of people will have odd lots, and I guess not a lot will have a portfolio consisting of multiples of 8 lots of OCBC shares, since it's such a big cap. The pool of unsubscribed rights will be very low. I just don't think they'll be so good to round up your 1125 shares to 2000 shares, giving you a super huge discount due to the $7.65 rights price. Chances are not good that you'll have all your excess rights allocated, if at all.


2. Buy in 8 shares from the unit share market at $10.20. The unit share market is available to a few brokerage. I know of two - poems and standard chartered bank (sort of). You'll be entitled 1 share of rights. You'll have a total of 9 shares. Apply for 991 excess right shares at $7.65 to round up to 1 full lot.

Average price per share: $7.59

Advantages: You can't get any lower than this in terms of average price per share after the rights exercise.

Disadvantages: You wish! From what I know, the total number of excess rights allocated to you will not exceed the number of total shares you own. This rule is a good guide to follow for any rights exercise: If you have 4 lots, you don't need to apply more than 4 lots of excess rights. I guess for poorly subscribed rights exercise, there's a possibility that you'll be dumped so much excess rights that you'll be scared. I don't think this particular one is going to be a poorly subscribed rights exercise. It's a good rule to follow, nevertheless.


3. Buy in 800 shares from the unit share price market at $10.20. You'll be entitled 100 rights shares. You'll have a total of 900 shares. Apply for another 100 excess right shares to round up to 1 full lot.

Average price: $9.69

Advantages: In the near future, fingers crossed, SGX is going to implement board lot trading size of 100 shares, instead of the current 1000 shares per lot. If that's the case, whether you get the excess rights allocated to you or not, you'll still have round board lot size. Let's say you are not allocated any excess rights, you'll have 900 shares in total. In the near future, this 900 shares will be 9 lots (based on 100 shares/lot). Let's say you're allocated the total of 100 excess rights shares, you'll have 1000 shares, so you'll still have 1 round lot for easy trading. This case is more likely too...getting 100 excess rights to round up to the current board lot of 1000 shares/lot seems to be more possible than the scenario painted in case 1.

Disadvantages: It might not be worth it, especially if you can't get any excess rights. But you won't know until you do it ya? Do take note of commission also, since I didn't include it in my calculations. If you have standard chartered bank, it might be worth a shot. Who knows?


4. Buy nil paid rights during the trading period from 1st Sept 9am to 9th Sept 5pm

Disadvantages: You'll not maximizing the $7.65 issued price of the rights shares if you buy off the market during the nil paid rights trading period. I don't see why anyone would not subscribe to their rights shares...so I don't think it'll be seriously undervalued compared to the mother shares to be worth a shot at this.


5. Buy in after the whole rights issue is over

Advantages: Based on the scenario I've seen in all the rights issue, the price will go down after the rights. This might happen for OCBC too, but who knows right? If that's the case, you'll enter with all the complications settled. No need to queue at ATMs and so on. The main advantage is clarity.

Disadvantages: OCBC will CA on this coming Fri. CA = Cum All, so they will also XD on the same day. You'll lose out a bit on the interim dividend of 14 cts per shares. This can be an advantage of sorts, since the price after XR and XD (in combination, it's CA) will push the price down naturally. So when you buy in after all the she-bang is over, you'll not be entitled to the dividend of 18 cts per share (Thks cy for the correction!) That's $180 per lot, not something to thumb your nose at.




So there! All your options I thought of are laid out in front of you. I'm leaning towards (3) and (5). There's also always a last option - not to act at all.

86 comments :

cy said...

correction:dividend is 18cents per share.

la papillion said...

Hi cy,

You're right. It's 18 cts for this coming interim dividend. I saw the wrong row in the site. Thanks for the correction.

Anonymous said...

Hi there,

I've 1 lot and I wish to sell away without applying for rights. Should I sell on Thursday? Or should I sell on Friday? Will I get the 18cts dividend if I sell on Friday instead of Thursday?

la papillion said...

Hi anonymous,

If you sell on Fri 22nd Aug, you won't be entitled to the dividend because you have to hold the shares till 25th Aug 9am before you'll be entitled to both rights and dividends.

So if your concern is to get the dividends, then you should hold it till Mon 25th. But you do not want to apply for rights...hmm.

Well, you can hold it till monday, be entitled to dividends and rights, sell the rights on the open market during the trading period. It's the best solution for your predicament, I think.

Felix Leong (pipi486) said...

Good post, keep it up

la papillion said...

Hi Felix,

Thanks for the encouragement!

Shine in Rain said...

Good analysis LP!
Just wondering, now I have 1 lot so if I apply for say 875 excess rights shares is it gonna be an all or nothing scenario? (Or I should be less greedy and just round up the odd lots to nearest 100).

la papillion said...

Hi SIR (lol),

Apply away! It won't be an all or nothing scenario. You can be allocated partially from what you applied. Who knows, if fortune smiles on you, you might really get 875 shares haha!

Anonymous said...

Thanks for your clarification! Cheers!!

la papillion said...

Hi anonymous,

Most welcomed :) Huat ah, with ocbc shares keep shooting up :)

Rich98 said...

Hi, I just came across this post and find it very interesting. I really need help from the advise of the professionals here....I bought 8 lots of OCBC shares at $10.24 through CFD on 19 Aug. Now I am at a loss on what to do on coming Monday morning to maximize my profit/loss. Can someone offer me some good advise here?

la papillion said...

Hi Rich98,

Hmm, CFD..

There are two issues. First, Mon will be CA, so there will be a dividend entitlement and a rights entitlement.

Let's talk about dividends first. Having CFD means you won't be entitled to dividends since you're not holding the ordinary shares, but the company that you do CFD trading should give you a dividend adjustment to your account to reflect the drop in price after XD.

Secondly, the rights issue. Technically, you're not holding OCBC shares, so you're also not entitled to your rights.

From www.ig.com site, I dug out the following:

"If you have an open Limited Risk share CFD position where the underlying share is subject to a rights issue or open offer and the subscription price is:

(a) in or at the money at the closing price of the underlying share on the last trading day for that share immediately before the ex-date, we will treat the rights issue or open offer as being successful and accordingly increase the size of your CFD position to reflect the effect of the rights issue or open offer or

(b) out of the money at the closing price of the underlying share on the last trading day for that share immediately before the ex-date, we will treat the rights issue or open offer as not being successful and accordingly leave your CFD position unchanged. This treatment will apply regardless of whether a rights issue or open offer becomes successful after being out of the money at the closing price of the underlying share on the last trading day for that share immediately before the ex-date or is not successful after being in or at the money at the closing price of the underlying share on the last trading day for that share immediately before the ex-date. Importantly, in both situations, we will alter the level of your stop such that the maximum amount you are risking under this open share CFD position remains the same before and after any adjustment is made for the rights issue or open offer."

Different companies might have different treatment for rights issue, so you better check with your broker/company for their policy.

At this pt in time, I'll be worried about minimizing your losses and making sure I won't be tripped by the technicalities of holding a CFD (instead of ordinary shares)in the event of a dividends payout AND a rights issue, especially the latter.

Call your broker first thing on Monday to find out pls!

Rich98 said...

Thanks LP for your comments and advise. I have been trading CFD for quite a while and all these while, I have been paid dividends. Well, technically speaking, they are dividend paid to me by the company but by the stock broking firm. Hence I'm pretty sure I will be getting the dividend amount on Monday. Secondly, I have also checked with my broker last week and she has confirmed that I will also be given the rights but I must sell it within the specific window.

la papillion said...

Hi rich98,

Ah,that's good. Glad to know that you've got it all figured out. Seems like you know what's happening already, haha :) I've seen some blur people trading cfd asking for help in Facebook regarding the rights issue, so I'm worried for them lol

2qus said...

Hi,
seeking your opinion as this is my first time trading rights.

so i read the prospectuses - there will be a period of time (1st to 9th sept) people can buy the unit rights (ie the small qty such as 275, 375 or whatever number to help top up to 1000) from the market itself ? and i am using POEMS

also, then from 9th to 15th sept - we can apply for any excess one needs from the ATM direct ?

is that correct ?

la papillion said...

Hi 2qus,

The 1st to 9th sept is the nil paid trading rights period. It's a period to trade their rights, which haven't been paid and therefore not subscribed yet, in the open market. You can sell off the rights if you choose not to pay and subscribe to it, or you can buy more to round up to full lot, like what you've said in your comment.

I'm not sure when is the first date, but the last day to accept your rights by paying it through ATM is 15th Sept. That's also the last day to apply for excess rights. It's all in the same procedure.

You might want to read my newbie's faq: http://pub11.bravenet.com/faq/show.php?usernum=910991976&keywords=rights

Do take note that applying for excess might not guarantee that you will get all that you applied, if at all. You will definitely have what you've been entitled. but nothing is guaranteed for the excess rights shares that you applied. You also have to pay for them first. If unsuccessful, they will refund you.

Hope it helps!

Anonymous said...

Hi,
I am new to rights issue. If I sell my 1 lot of OCBC shares on 25 aug or later, can I said that I will be entitled to dividend and rights entitlement. But I am not selling my rights and intend to subscribe more. Is it ok to do so even after selling the main 1 lot of shares.

Please advise and thank you.

la papillion said...

Hi,

Yup, you'll still be entitled to dividends and rights if u sell on 25th onwards.

If u sell off the mother shares, then there's a little complication. I've a theory that you won't be allocated excess rights more than the total amt of shares u had before xr. So if I go by that theory, you might not get any excess rights at all, though you'll still have your entitled ones. I can't prove it, of course, so do what u deem fit.

Anonymous said...

Hi,
I have 1 lot in my SCB trading account. Do you know how I will be able to apply for rights or sell them? I know 1-9 Sep is the period to sell them so should I be receiving a call from SCB before 1 Sep?

la papillion said...

Hi,

If it's SCB, then it's custodian account, so technically you don't own the shares. Based on experiences of people who had rights issue also trading under SCB account, they will call you up to ask if you would like to subscribe. The timeline will be tighter than the one for ordinary shares, supposedly because they will have to consolidate all the replies before the official timeline.

Just wait for them to enquire, or call them to ask.

Pls, just use a nickname next time. I'm quite sick of replying to anonymous 1, 2, 3 etc without knowing who they are. How do you know which anonymous i'm answering to??

Jaymie said...

Thanks for the quick reply!

dontknowhow said...

Hi,
i am very new to rights.
i have one lot on hand. can I sell the rights?
how do i sell the rights?
how much will i get for selling the rights?

THanks in advance

la papillion said...

Hi dontknowhow,

You: i have one lot on hand. can I sell the rights?

Me: Yes, when the nil paid trading rights period starts on 1st to 9th sept.

You: how do i sell the rights?

Me: Look for the counter code. Usually it's like R followed by some numbers. Just sell like it's a normal stock counter and you also have to pay comms.

You:how much will i get for selling the rights?

Me: Depends on the price you sell at? Mother share - 7.65 = fair value of nil paid rights. So if the mother share now is 10.20, the nil paid rights should be about 2.55.

nick chai said...

hi guys,

I am newbie too. hope you guys can help.

i have 10 lots, so i am entitled to 1250 shares, but i want to apply for 2000 shares.

So can some good samaritans help me with when i need to do what in details. eg. go atm on and apply how many shares, how much etc.

Thanks.

la papillion said...

Hi Nick,

They'll send you a prospectus soon with instructions on what to do, so wait for it.

Just go to the atm before the dateline and prepare to pay in advance for your 1250 entitled shares, as well as 2000 excess rights. Each right share is 7.65, so 1250+2000 = 3250 will cost you $24,862.50. Need to pay a small transaction fees too, about a few dollars only.

I laid out the instructions in my newbie's faq here: http://pub11.bravenet.com/faq/show.php?usernum=910991976&keywords=rights

It's all going to be in the prospectus they are going to send you soon. Hope it helps.

paythis said...

Hi - my first time as well. was doing some numbers. For the rights, it just the entitlement to the shares, which one must pay as well right ? eg if i have one lot OCBC = 125 rights share and plan to buy 875 from the open market (currently at 2.15) and apply 100 (to make 1 lot) directly via the ATM (at 7.65). However, for the former (ie buy from the market) , i would have to pay first the 2.15 * 875 - after that i have to pay 875 * 7.65 at the atm right ?

la papillion said...

Hi paythis,

If you bought your shares from the open market, yes, you have to pay the market price of the nil paid right shares @ $2.15 each, pay a commission to brokers, then at the end of it subscribe by paying another $7.65 at the ATM. You're right.

For avoidance of doubts, any nil paid rights that you are entitled to, bought from open market during the trading period or/and applied for excess, had to be paid at $7.65 per rights share at the ATM in order to convert it to ordinary shares. If you do not pay up by the dateline, it will be worthless.

But I don't understand why you need to apply 100 to make it 1 lot. 1000 mother shares + 125 entitled rights shares + 875 open market rights shares = 2000 shares. Why do you need another 100 shares to make it up to 1 lot?

K said...

Currently I have 2 lots of OCBC and will received 250 shares rights.

1. Does it make sense for me to go in the market now to buy 6 x OCBC bank R125 @ $2.07?
2. Will I get separate letters to pay from my earlier 250 share rights and the my newly acquired 750 share rights?

Thanks.

K said...

One more question, if I intend to buy OCBC shares to keep.. at this moment, should I buy the OCBC share or the OCBC rights and top-up later? what's the difference?

la papillion said...

Hi K,

You:Does it make sense for me to go in the market now to buy 6 x OCBC bank R125 @ $2.07?

Me: It depends on your objective for buying the R125. Are you thinking to get round lots? Are you thinking of getting ocbc because the price is cheaper now? If you're getting r125 for rounding purposes, there's also another option for applying for excess rights. It might be low chances, but there's still a possibility of getting it much cheaper than buying from open market. The disadv is of course the unpredictability of getting any. If I'm you, I'll buy some off market and apply excess.

If you're getting it because it's cheap, not because of rounding, then I've no answers.

You:Will I get separate letters to pay from my earlier 250 share rights and the my newly acquired 750 share rights?

Me: The letters are not so important right? You can still go to the atm to apply for all the nil paid rights that you (1) are entitled to, (2) bought from open market. Just count properly and make sure to include everything.

That being said, I faintly remembered that I got 2 separate letters for my past rights exercise. One is for the entitled one, the other is for the rights I got from open market. But this doesn't meant that OCBC would do so for this case.

You: One more question, if I intend to buy OCBC shares to keep.. at this moment, should I buy the OCBC share or the OCBC rights and top-up later? what's the difference?

Me: If you buy OCBC shares, you pay the market price and the brokerage. That's it.

If you buy OCBC rights, you pay the brokerage for the rights, you pay 7.65 per share at the ATM, pay a small transaction fee imposed by the bank, wait a few days and you get back the same thing.

If I'm you, I'll buy direct instead of the rights. Unless the rights present an arbitrage opportunity.

K said...

Thanks for the reply. For my education, if I do nothing to the rights after Sept 9, it will be worthless? So I either sell it before Sept 9 or pay $7.65 to convert it to ordinary shares before Sep 15?

la papillion said...

Hi K,

You: For my education, if I do nothing to the rights after Sept 9, it will be worthless?

Me: Yes.

You: So I either sell it before Sept 9 or pay $7.65 to convert it to ordinary shares before Sep 15?

Me: Yes to both.

I've heard of a horrible case where a person sold all the mother shares and bought the rights, thinking that he had the shares. He didn't know he had to convert or had forgotten about it, eventually it expired worthless. It's a lot of money lost.

For avoidance of doubt, you have to pay 7.65 for every right shares you have(either bought from open market or entitled) before the dateline so as to convert them to ordinary shares. If not, you'll have scrips of worthless paper and a very painful lesson.

Chuanwei said...

Good day ! If I have 2 lots, so entitlement is 250 shares. What do you think are my chances to subscribe to excess rights 750 shares to round up to one lot?

Or should I just purchase 750 rights from the open market?

la papillion said...

Hi cw,

I would think the chances are very low to get excess rights. Most people will have odd lots, so I bet that the excess rights will be oversubscribed tremendously.

It's hard to say. There are adv and disadv of getting open market rights. I'll do a bit of both.

Also, don't be too worried about odd lots. It can easily be sold through units share market. Perhaps the new board lot size will help a lot in the future too.

tm said...

Hi! Ive a question about trading rights under my shares bought with cpf. I have 125 nil paid rights that do not appear immediately under my online brokerage (ocbc securities) How do I go about selling these nil paid rights through ocbc securities (i do not want to top up to buy more) or is there a diff route to sell these nil paid rights? Thanks for the help:)

la papillion said...

Hi tm,

I've no experience in using cpf for rights exercise. But I googled ocbc securities here:

http://portal.iocbc.com/help-and-support/cpf-trades.html

Here's what it says under selling rights entitlement:

If you are entitled to rights in your CPF Investment Account and wish to sell off the rights entitlement, please take note to:
a)Select “cash” mode for your sell order
b)Provide us with your CPF Investment Account number
c)Call your Trading Representative immediately on the trade date for amendment to “CPF” once your order is fulfilled

I think you'll find more answers by calling your broker.

tm said...

thank you very much for the quick response.

I have another enquiry - currently as per CDP i am holding 125 rights shares (cash this time) under 'OCBC BANK R', however the lot size is 1,000 for 'OCBC BANK R'. If i were to want to top up instead of sell away my rights, i am unable to buy 875 rights under 'OCBC BANK R' as it doesnt fit the lot size. i can however do so under the ticker 'OCBC BANK R125'. would these two tickers then add up to 1,000 for 1 lot of OCBC shares?

Thank you once more for your time.

la papillion said...

Hi tm,

Okay, so you have 1 lot of mother share, and you're entitled 125 rights shares. You want to top up another 875 shares to round up.

You should then buy 7 lots of R125 (125x7 = 875) from the open market. This mean you'll have 125 (entitled) + 875 (7 lots of R125 from open market) = 1000 nil paid rights, which is one round lot.

Remember to go to the atm to pay $7.65 each (total $7650) to convert all your 1000 nil paid rights shares to ordinary shares before the dateline!

tm said...

the thing is, if i buy OCBC R125, it trades under a different ticker - UE8R instead of UE7R of OCBC R (which my nil paid rights are on). is this an issue when i convert to shares?

thank you

la papillion said...

Hi tm,

I really don't think it's going to be an issue. After all, they are just nil paid right shares though the board lot size is different for the 2 counters. The purpose of the different board lot size counter is just to make it easier for people to buy/sell off rights. There's always a few counters, with different ticker and varying board lot size during rights exercise.

When you go to the atm, they are also going to ask you how many total nil paid rights share you're going to subscribe.

To be very sure, do ask your broker about it. I've no skin in this - I don't have any rights shares nor OCBC mother shares.

tm said...

hi lp,

thank you for all the assistance you have rendered :) i think its high time i called the broker! haha

la papillion said...

Hi tm,

No problem, hope it helps. You should call to verify! haha

K said...
This comment has been removed by the author.
K said...


Hi,
I have 2 lots of OCBC shares in my SRS and thus was entitled to 250 rights (and applied for an excess of 250 rights). The closing date for that is Sep 9. How will I know if I was successful in getting the excess shares and thus need to pay $7.65 by Sep 15 to convert them to ordinary shares? (is there enough time?)

Thanks

la papillion said...

Hi K,

Can't help on this one. I've no experience in dealing with srs so you'll have to call them up to ask and clarify. Sorry.

JS said...

Hi...
Need help on the right issue..
I was given 125 shares.

Are these 125 given to me free of charge? Can I just sell them off in before 9 Sept?

For example, if now OCBC R125 is $1.96

Does that mean by selling 125Shares, I will earn $245( exclude commission) ?

Thanks your help...

la papillion said...

Hi JS,

Ya, the 125 is your entitlement, free of charge, so to speak. You can sell them off if u do not wish to subscribe to the nil paid rights by paying 7.65 each.

Yup, you'll get 245 gross if u sell 1 lot of r125.

JS said...

Great! Thanks La Papillion.......

K said...

http://www.straitstimes.com/news/business/companies/story/sheng-siong-placing-out-120-m-shares-raise-804-mil-singapore-expansion

What does this mean to me as a minority shareholder? Does the mean the share is now valued at 67 cents?

la papillion said...

Hi K,

You'll get lesser dividends and suffer capital losses in terms of share price.

No, it means the dividend and price will dilute by 8.67%. All things being equal, expect the dividends to drop to pre-placement dividend/(1.0867) and the price to become pre-placement price/(1.0867)

Anonymous said...

It does not seem to benefit me. Who does it benefit?

la papillion said...

Hi K,

Who does it benefit?

Have you asked yourself why sheng siong wants to raise funds by doing private placement? If they managed to do what they are supposed to do with the funds, who will reap the rewards?

Maybe if you ask yourself along that line you can decipher the answer yourself. I'm not well acquainted with the business of sheng siong.

Anonymous said...

Hi LP,

Just back from ATM but couldn't enter the number of rights.
1 lot = 125 units, so i have to enter at ATM as 875,000 units. But it just couldn't move further. Do you know what's wrong with my entry?

Thanks

Sam

la papillion said...

Hi Sam,

I'm not sure what you mean by not moving further. What did the screen ask you to input and what stage did it not go further?

You might want to call them to ask or maybe use another ATM machine?

Linus Van Pelt said...

Hihi LP,
1. Today (9 Sep) @ 5pm is the last day & time for trading of "nil-paid" Rights. Am I right to say that it is the last day to "sell" my entitiled allotment (in my case 250 shares) and/or "buy 750 shares (so as to make to 1,000 shares)?

2. 15 Sep is the last day for acceptance of and payment for Right Shares. So I must go apply and pay for at least 250 (my entitled allotment shares) plus extras if i want try my luck, right?

eh. I am very green in trading. Hope can seek some advise here.
Grateful~~~

la papillion said...

Hi lvp,

1. Yup, it's the last day to do any trading of nil paid rights, be it buy or sell.

2. Yup, that's right. Do take note there a opening and closing time for atm. I think latest is 930pm. Don't miss that time.

LVP said...

LP, thank you :D
Grateful for providing an avenue for people like me to address some of our very basic (yet most critecal) financial questions here... -grin-

Your posts are nice! Like the snail and the girl...

Best Wishes


la papillion said...

Hi LVP.

Nah, no worries...we all share things here. Thanks for reading my posts :)

Anonymous said...

Hi LP,

Sam here, just to let you know i managed to get my balance rights at ATM.
Thanks for your great advice.

la papillion said...

Hi Sam,

That great, glad to hear that. Luckily u didnt so this last min so you still had time to troubleshoot!

Anonymous said...

Hi All,

I don't own any OCBC shares and I applied for excess rights using ATM. What should I do after 15 Sep if I get any rights ?

la papillion said...

Hi anonymous,

Firstly, can you pls use a nickname instead of anonymous? Thanks

If you don't own any shares, and you apply for excess rights, chances are you'll get none. I'll be glad to be proven wrong though :)

If you apply now by paying up, you've already done what needs to be done. Just wait for the shares to appear in your CDP account. Nothing else needs to be done.

I just don't think you'll get any, that's the biggest bugbear lol!

Glen said...

Hi la papillion,

lol ok. Thanks for the kind advice.

la papillion said...

Hi Glen,

Most welcomed ;)

Gary said...

Hi LP, I am currently traveling - is it possible to apply for the rights through other methods besides the ATM? If no, would you have some basic instructions on what are fields to be completed so that I can ask my friend to help me apply. Many thanks!

la papillion said...

Hi Gary,

First, 15th Sept is the last day.. U better hurry.

I only know two ways to do it. First through atm. U need to know your cdp account number, how many entitled rights u have and how many you want to apply. Lastly, u need to have the funds to pay 7.65 for both the entitled and the excess u are applying for.

The other method I know is to send them back the form. It should be mailed to your address. You just need to fill in the form, enclose a cheque and return back to them by 15th Sept. I would delivery personally in case the posting of the letter got screwed up.

Hurry up!

Anonymous said...

I can either buy 5 or 105 shares to round off my total number of OCBC shares.

Any advise which way to go?


la papillion said...

Explain yourself. How come either 5 or 105? How can that be possible?

Gary said...

Hi LP,thanks so much for the confirmation. Luckily I passed my ATM card to my friend before I left just in case. Rights applied already!

la papillion said...

Hi Gary,

Glad it worked out well for you:)

lvp said...

Hey LP,
Scrip Dividend Scheme.
Recently received OCBC's notice to accept their dividend in cash or shares.

Being a minority shareholder, I can opt to receive 40 shares in lieu of abt $300 cash. 40 shares means I need to accumulate 25times (i.e. if dividend give out 2times/year need 20 years? so duper looong) in order to makeup for a full lot share.

Seems wiser to opt cash, right?
What's your take?

:D thank you!

la papillion said...

Hi lvp,

Haha, I think you need to think about a few issues first:

1. The board lot size is going to be changed from 1000 shares per lot to just 100 shares, coming next jan/feb. If that's the case, you don't need to wait 20 yrs to hve 1 full lot ;)

2. You hve to think about whether you need the cash for income or not. If you don't need it, then you might as well compound it by opting for scrips. That's the main adv for scrips, because each subsequent scrips you get will entitle you to get more scrips. Getting cash won't let you compound the returns.

3. If you get scrips, you are letting them buy in at the time of their choosing. If you are more inclined to time your purchase, then you might want to get cash. Cash can be deployed anyway and anytime at your own choosing. If you're the type who prefers to leave this kind of matters alone, then you might want to opt for scrips. It'll be automatic.


Based on these points, maybe you can clarify your decision to choose scrips or dividends ;)

lvp said...

Okay, I've mailed out! :D Decide to go wi the the scrip issued.

Thanks for sharing your take, LP!

la papillion said...

Hi lvp,

No problem!

Glen said...

Hi all, I applied for OCBC excess rights and checked my CDP account which i was not allocated any shares. Till now my funds are not refunded yet. Any idea usually how long does it take?

la papillion said...

Hi Glen,

So fast? I thought you'll only know on the 26th of sept?

You'll get it in within 1 or 2 weeks upon issuance of the rights shares, I can't remember.

Glen said...

Hi la papillion,

I reckoned that the rights will be issued on 25th Sep.

Thank you!

la papillion said...

Hi Glen,

Is yours out already? Should expect them to issue on 26th sept and start trading on these shares come the following mon, on 29th Sept.

toiletsiao said...

The rights allotment has been updated and credited to your CDP acc already..those with CDP online access can check for it now... for me i got 1689 excess rights...not too shabby

la papillion said...

Hi toiletsiao,

Thanks for the update! Congrats on getting your excess rights!

toiletsiao said...

thx thx la papillion ... for research purposes I have an entitlement of 2034 rights... I applied for 15lots excess and got 1689...been looking ard other forums..some got rounded up to nearest 100...some 1000

la papillion said...

Hi toiletsiao,

Hmm, looks like you got lucky :) It's quite a hot one, I'm surprised you can even get any excess lot. Oh well, maybe some are really blur and forgot to subscribe...

Congrats...easy money for you :)

Anonymous said...

Have you got the cash refund back yet?

la papillion said...

Hi anon,

I'm not vested. But I think with the issuance of the shares,u should have the refunds in. I think they've said within 2 weeks if I'm not wrong.

Anonymous said...

Hi,

I was allocated 500 ocbc excess rights. When can I sell them as "shares"?

Thanks.

Newbie

la papillion said...

Hi newbie,

You can trade them now from 29th Sept onwards, which is now.