I have seen a lot of ads recently on the issuance of DBS Preference Shares with a dividend rate of 4.7% (emphasised in huge fonts). I wanted to find out more and read up its prospectus on
However the prospectus is a 117 page long document, and it is not easy to understand. Buried inside this huge document is a section on risks, but the language is extremely difficult to understand. If DBS is targeting retail customers, the risks associated with this investment should be clearly articulated. It seems that DBS has yet to learn its lesson from the Lehman saga.
REPLY
I have ased a financial expert to make an analysis of this preference shares. The analysis will be available to posted in the members' section of the FISCA website and will be available only to members after login. Go to www.fisca.sg
5 comments:
I think its a very good investment given the dividend rate.
Regards,
Greatsage
http://sgwebreviews.blogspot.com/
I think its so -so only with its 4.7% yield. Capital appreciation is limited as its a preference share.
Better ones out there such as SATs ( singapore airport terminal) 4.5% yield ( 2.89 price) with possible chance of capital appreciation or
Singpost 5.2% yield current price 1.18)
Why limit an investments upward returns with a preference share? The only pros of DBS preference share is its relative safety compared with the the shares i mentioned above.
SGDividends
www.sgdividends.blogspot.com
If you buy this DBS pref shares at this point in time, you can forget about capital appreciation. In fact 80% probability that you will suffer some capital loss. Becoz interest rates now have only one long term direction ... up!
This instrument now is only good for retirees with large cash reserves, and simply want to live off the 4.7% interest. They must not need to touch their capital and they just want a safe instrument that will not likely go bust and have high chance of constant 4.7% payouts.
We can't blame the fiinancial institutions for giving us too much information since we are the one asking them to be more transparent. Look what happen now, we are eating our own bitter medicine now ! They now give us lots and lots of information, then we cannot complain again that they are not transparent. Did anyone notice nowadays in newspapers advertisements for new products - the footnote that used to be in very small print are now large, almost half the page. So we can't complain again that we did not see the small print. I think the FI is missing the point, don't give us quantative, give us quality, don't give us financial jargons we do not understand, give us in layman terms please.
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