Thursday, April 21, 2011

Hyflux Preference Shares

The Hyflux preference shares IPO has just ended and the balloting ratios are out. These preference shares give out a 6% dividend per year (payable semi-annually on 25th April and 25th October every year). The dividend is also cumulative. That means that if Hyflux is unable to give out the full 6% dividend in the year, the dividend will accumulate and get paid out on the next payout date. This makes the preference shares quite attractive.

Back to the balloting results.

Thoughts from this IPO:
1) When applying the IPO with both cash and cpf, the total shares applied are taken into account as a whole. I applied for 100 shares using cash and another 100 shares using CPF. But I ended up getting 50 shares under cash, instead of 30 shares for cash and CPF each.

2) Even though the IPO is about 5 times over-subscribed, everyone got at least 30 shares (paid 3k SGD). The private placement was 7 times over-subscribed. Based on such a good response, I would think that the preference shares will open with at least $103.

3) The highest band of the IPO balloting ratio always attracts my attention. The highest band investors applied for at least 20,000 shares each. Each share cost $100. That means that 5 applicants have a whooping 2M SGD cash + cpf on hand to apply in this IPO. The huge gap between the rich and poor is much bigger than you think

The Hyflux preferential shares will commence trading on the 26th Apr 2011. We shall see how it turns out then. =)

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