May 27 2008
OCBC Bank to Raise Funds From Preference Shares
Hot on the heel of DBS, OCBC has announced that they will be issuing as much as $1.5 billion dollars worth of preference shares.
However, unlike DBS, OCBC’s offer will be open to retail investors. Back in 2003, it had done the same with the shares having a dividend yield of 4.2%.
The question to ponder is, “why are the banks raising capital at this time?”
At the end of March, OCBC had a healthy tier one capital ratio of 12.2%, DBS had 9.2% while UOB had 9.9%. The regulatory requirement for tier one capital is only 6%.
Perhaps they see a way to put the raised capital to some good use.
Hi, I’m a newbie to investment. How/where do we apply for these preference shares or do I have to own an OCBC stock first?
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Hi Little,
If they make it available to retail investors, then it should be through methods similar to IPOs.
ie. ATM applications or placement through your brokers.
I’ll keep a lookout and update the site accordingly.
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Hi, when is the period/deadline for atm applications?
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Hi Green,
You can refer to this post for details of the latest offering.
http://www.lioninvestor.com/ocbc-to-raise-preference-shares-again/
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where is the secondary market for trading this preference shares? SGX?
[Reply]
Hi Calvin,
Yes, you are right. It’s on SGX.
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