HYFLUX NEW APPLICATION?

[znzyzyzx]

Why is the yield 2.9 and not about 5 ?

financial_guru:

QuiteKSMum:

Hi financial_guru,

Thanks for your insights...

Would it be too much to ask if you could analyze the various Pref shares/ Bonds in the market now? We bought some OCBC NCPS 5.1% recently and would like to explore the possibility of buying some more of such pdts eg DBS, UOB etc... (prob have to start a new thread)

How about the OCBC \"mother\" shares? Was contemplating getting some when px fell to $9 but missed the chance and now went up to $9.70...

Thanks again...

Actually it would be too much to list every pref share down. But I'll illustrate with an example.

Let's take UOB 5.05% pref share as an example.
This pays semi-annually in March and Sept every year, and UOB has the option to redeem at the earliest date of Sept 2013.
Current market price is $105, compared to face value of $100 per share.
There are 5 coupon payments left until the earliest redemption date.
When I input the above values into my yield-to-call calculator, the yield I get is 2.9%.
My opinion would be not to buy this share right now. The returns are not worth the risk. There are higher yielding investments with less risk available.

[micollh]

hyflux needs min 10k right? i rather but their share… any difference if i top up their hyflux share than buying this one…

[financial_guru]

micollh:

hyflux needs min 10k right? i rather but their share.. any difference if i top up their hyflux share than buying this one..

When you say top up, you mean buying more of the ordinary shares already listed on SGX?

I know they pay dividends on their ordinary shares, but not too sure what is the current dividend yield.

In terms of liquidation in case hyflux goes belly up, their pref shares are higher priority in terms of getting back something vs their ordinary shares.

You'll have to think abt whats the proportion of hyflux in your overall investment portfolio. Are you overinvested in this company?

[micollh]

financial_guru:

When you say top up, you mean buying more of the ordinary shares already listed on SGX?

I know they pay dividends on their ordinary shares, but not too sure what is the current dividend yield.

In terms of liquidation in case hyflux goes belly up, their pref shares are higher priority in terms of getting back something vs their ordinary shares.

You'll have to think abt whats the proportion of hyflux in your overall investment portfolio. Are you overinvested in this company?

yes i meant top up.i think u have a point, preference share has higher priority than ordinary share..

[hquek]

Am considering this also. Thing is, Hyflux dividend is not fantastic - about 1.5% thereabouts (based on Friday’s closing price).


Thus, I’m not certain how the preference share will pan out. The only consolation is that if pref shareholders don’t get dividends, this will roll over to future years? and ordinary shareholders won’t get a cent too. Am I right?

Thanks.

[rosemummy]

hquek:

Am considering this also. Thing is, Hyflux dividend is not fantastic - about 1.5% thereabouts (based on Friday's closing price).


Thus, I'm not certain how the preference share will pan out. The only consolation is that if pref shareholders don't get dividends, this will roll over to future years? and ordinary shareholders won't get a cent too. Am I right?

Thanks.

If the company do well in future, the ordinary shareholders can get higher dividends plus appreciation in the share price. Preference shareholders will get just the fixed rate of 6% (or 8% if it doesn't get redeemed after 7 years). The preference shareholders don't get to participate in the upside at all. Really depends on your view of the company's prospects. If you're optimistic, go for the ordinary shares.

[QuiteKSMum]

financial_guru wrote :[quote]Are you looking around for something to invest in?

Can I know your expected investment time horizon (how many years?) and risk appetite (low, medium, high)?[/quote]My own risk appetite is at most a medium. Time horizon? - between 5 -8 yrs.
This is my \"appetite\", need to \"coordinate\" with DH's. Will feedback once I get a clearer picture.

Thanks.

[financial_guru]

hquek:

Am considering this also. Thing is, Hyflux dividend is not fantastic - about 1.5% thereabouts (based on Friday's closing price).


Thus, I'm not certain how the preference share will pan out. The only consolation is that if pref shareholders don't get dividends, this will roll over to future years? and ordinary shareholders won't get a cent too. Am I right?

Thanks.

Hquek, what's your risk appetite like? Do you already have an existing stock portfolio or is this your 1st pref share consideration?

[financial_guru]

QuiteKSMum:

My own risk appetite is at most a medium. Time horizon? - between 5 -8 yrs.
This is my \"appetite\", need to \"coordinate\" with DH's. Will feedback once I get a clearer picture.

Thanks.

Actually v clear already!

Usually from my experience, the wife's risk appetite is lower than the hubby.

In my humble opinion, this issue may not be suitable for you. I'll classify it closer to high risk and this pref share is a perpetual issue. Hyflux may choose never to redeem and you'll have to find a secondary buyer on the market if you want to cash out after 8 yrs.

[QuiteKSMum]

Hi financial_guru,


You're right. I've already decided to give this a miss - too much uncertainties and too many unknowns...

Thanks.