Friday, September 21, 2018

The returns of OCBC 5.1% preference shares

I bought the OCBC preference shares, OCC 5.1% NCPS, a while ago for my parent's retirement funds. I didn't even know that OCBC had redeemed back the perp on their first call date until I saw the capital returned to my bank account. Another one bites the dust... So how had it performed? Let's take a look at the details:



1st tranche:

Buy date: 3rd-Feb-2014
A) Buy price: $106.10
B) Quantity: 100 shares
C) Comms paid for buying: $37.19
D) Dividend collected: $2551.40
E) Total profits: 100*B + D - 100*A - C = $1904.21
F) Recall date: 20th Sept 2018
G) Total duration: 4.63 yrs
H) Total % profit: E/(100*A + C)*100 = 17.88%
I) % returns/yr = H/G = 3.86% per annum

2nd tranche:

Buy date: 14-Jan-2015
A) Buy price: $106
B) Quantity: 100 shares
C) Comms paid for buying: $36.30
D) Dividend collected: $2041.39
E) Total profits: 100*B + D - 100*A - C = $1405.09
F) Recall date: 20th Sept 2018
G) Total duration: 3.68 yrs
H) Total % profit: E/(100*A + C)*100 = 13.21%
I) % returns/yr = H/G = 3.58% per annum


I think the returns per annum is pretty decent, especially at those times where the Singapore savings bond is not even available yet. Those are the times when the interest rate is super low. In fact, so low that I am compelled to help my parents because their default action is to put into fixed deposit.

I'm glad I didn't screw it up for them.

2 comments :

Anonymous said...

Tot OCBC '5.1%' preference shares should give '5.1%' yearly return. Apparently it is much lower.

la papillion said...

Hi,

No no no. Its 5.1% pa only if you buy at the par value. Since I didn't buy at par value, the returns will be lesser.