Wednesday, May 30, 2012

SP Ausnet - Script Dividend Scheme and Rights Issue

I have SP Ausnet shares in my portfolio since 2007. During the last financial crisis when its price dropped below S$1 I average down my cost. Frankly I like the share as its price has been quite stable and dividend payout consistently good. I was looking for opportunity to buy more.

SP Ausnet has a dividend scheme in place, but I have never taken part. 2 reasons: First, I think the discount is not attractive enough. They used to offer 2~3% discount from the average trading place over a certain period. This time round they don't offer any discount! The form states 0% discount in bold. When I saw the form I felt that they have taken the investors for granted. The 2nd reason is that they make the form in such manner that once you accept teh script once, you are deemed to accept the script in all future dividends by default, until you submit a form to CDP to withdraw your participation. There is no way you can opt for receiving the script only for the present dividend.

SP Ausnet has annouce rights issue of 3 out of 20 shares at the price of S$1.25 per shares. Initially I thought this was a good opportunity to buy more shares. With the price dropped to S$1.245~1.25 now, I am no longer sure that taking up the rights issue is a good choice. I think the rights issue will end up a flop for SP Ausnet, unless the share price can pick up in the next few days. I am waiting till next week to decide my participation.

4 comments:

Sanye said...

Just to complete the story, I finally decided to subscribe to the rights, since the share price stayed above the subscription price.

Integrated Solutions said...

I would like to say that be aware regarding dividend paying stocks. It should not be ignored.

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Drizzt said...

hi sanye, what do you think of SP ausnet 3 for 20 rights issue. technically they are like taking back 15% yield that they have given you this two years isnt it.

Aarav Sharma said...

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