Tuesday, June 3, 2008

OCBC preference shares

I'm giving this a miss as the dividends of 5.1% doesn't even cover the current cost of inflation. I can safely beat that by investing in Singpost, SPH or starhub. Besides, OCBC they can be redeemed at the option of OCBC Bank, but not the preference shareholders, five years from the date of issue.

Considering the SIBOR is at about 1%, any rise in interest rates in the next few years (which is very likely) will bring downward pressure on preference shares trading price.

Hence, I will not consider applying for it.

For those interested, you can apply it via ATM or your trading account.

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