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(06-01-2011, 08:07 PM)aspeed Wrote: Even if the dividend is given out in cash, they (or anyone else) can alway choose to use the cash dividend to buy from open market to boost up their holding. The only difference is they would buy it at prevailing trading price (plus the brokage).
So seriously be it scrip or not, there isn't much difference except the price discount of scrip price.
In one simple stroke, the father-and-son team added 588,867 MTQ shares at a discounted price of only $0.83/share without brokerage and other incidentals, and also raised their combined shareholding in MTQ by 0.6615%. They simply couldn't have achieved the same through open-market purchases.
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Just to clarify, I am also not a "big" shareholder. I have less than 50 lots so I also ended up with an "odd" lot of less than 1,000 shares.
But the point I am trying to make is that I view my shares as having part ownership of a long-term business, and so I choose to increase my stake through this method (i.e. scrip dividend).
By the way, this is the first time I am participating in a scrip dividend exercise. 
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(06-01-2011, 10:20 PM)dydx Wrote: In one simple stroke, the father-and-son team added 588,867 MTQ shares at a discounted price of only $0.83/share without brokerage and other incidentals, and also raised their combined shareholding in MTQ by 0.6615%. They simply couldn't have achieved the same through open-market purchases.
The scrip is offer to all shareholders. If all shareholders choose the srcip, the net percentage holding will remain the same.
so ok, some (or majority) will choose cash, and net holding of Kuah is increased, but it is also "average out" with those other shareholders (18% of them, from Musicwhiz) that also choose scrip.
If dividend was cash only, and they buy from open market, although their purchase price is higher (abt 10% higher), but what they buy truely add to their holding. The net increase in holding percentage between using scrip and cash may be the same (its just an estimation, i did not go into detail calc to verify).
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I think the issue with scrip dividend and why most minority (including myself) has never opted for it is (1) discount is insignificant (typically less than 5%) in this case 10% sound higher than the usual; (2) you end up with odd lots.
Of the 2 reasons, (2) is the most pertinent one. Having odd lots in your holdings no matter how you want to look at it is a pain. Of cos there really is nothing 'odd' about having odd lots in your holdings - until you want or need to liquidate. POEMS unit share platform is great but you usually end up taking a hit when you buy or sell.
So when I opted for cash, I'm not really taking a position on the long term fundamental of the company. I'm just doing it for practical reason.
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(07-01-2011, 09:09 AM)lonewolf Wrote: So when I opted for cash, I'm not really taking a position on the long term fundamental of the company. I'm just doing it for practical reason.
I agree with you on the odd lots thing. But if there is no intention to sell and you are a long-term shareholder, it would make sense to choose scrip over cash, which was what I did.
Another point to note is that if you choose scrip, for the next dividend, it will be paid based on the additional number of shares you have + your existing stake.
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We should all blame SGX for the situation. They can invest $200M to improve their system for high-speed algo trading but cannot do away with the archaic requirement of trading in lots of 1,000 shares.
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(07-01-2011, 02:00 PM)egghead Wrote: We should all blame SGX for the situation. They can invest $200M to improve their system for high-speed algo trading but cannot do away with the archaic requirement of trading in lots of 1,000 shares.
Oh hoho! Spot on, my friend! It's ridiculous to me too that we have to trade in board lots of 1,000 shares. At least make it smaller like 100 shares or 10 shares? SGX simply cannot make it on this aspect! 
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extra-units in cdp liao.. yea! 
1) Try NOT to LOSE money!
2) Do NOT SELL in BEAR, BUY-BUY-BUY! invest in managements/companies that does the same!
3) CASH in hand is KING in BEAR!
4) In BULL, SELL-SELL-SELL!
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Trouble in Bahrain. It is worrisome as MTQ are going into the country in a big way.....
Feb 17, 2011
Bahrain: Diversified economy, tangled politics
MANAMA: Bahrain, a small, strategically important nation in the Persian Gulf, is home to the United States Navy's 5th Fleet, and to one of the world's most free economies.
The 5th Fleet base is considered one of the Pentagon's major counterweights against Iran's growing military reach in the region. It operates at least one aircraft carrier in the Gulf at all times, along with an 'amphibious ready group' of ships with marines on board.
Their presence is central to a longstanding US commitment to ensuring the free flow of oil through the Gulf, while keeping an eye on a hostile Iran and seeking to deter piracy in the region.
Bahrain became a more prominent partner for the Pentagon after the 1991 Gulf War with Iraq. Since then, it has granted US forces increased access, plus permission to store wartime supplies for future crises.
Its role as a linchpin to the US military framework in the Gulf is not all.
Bahrain is a regional financial and banking hub and has the most diversified economy among Gulf states.
One of the first Gulf states to discover oil, Bahrain was forced to diversify its economy because of limited resources.
Oil revenues represent just 13 per cent of its gross domestic product but 60 per cent of the government's source of funds, the Wall Street Journal has said.
Last month, it was named the most free economy in the Middle East - and the 10th most free in the world - by the US-based Heritage Foundation, based on criteria such as economic openness, trade, the efficiency of domestic regulators, and the rule of law.
It ranked 28th worldwide last year in the World Bank's 'Ease of Doing Business' index. Many multi-nationals with business in the Arabian Gulf have a presence in Bahrain and the island nation is home to more than 100 offshore banking offices and units.
It is also known for being a recreation ground for residents of Saudi Arabia, who can drive over a causeway to enjoy the Western-style night clubs, bars and beaches of the far more permissive kingdom.
About half of the tiny island kingdom's 1.3 million people are Bahraini. The rest are foreign workers.
Bahrain's domestic politics has long been tangled. The King and the ruling elite are Sunni Muslims.
The majority - about 70 per cent - of the local population of about 530,000 are Shi'ite Muslims. There have been long-running tensions between the Sunnis and the Shi'ites.
The Shi'ites claim they are discriminated against in jobs, housing and education.
Reforms in the past decade, including parliamentary elections, have opened more room for Shi'ites.
But they complain the Sunni-directed system still excludes them from any key policymaking roles or top posts in the security forces.
NEW YORK TIMES, REUTERS, ASSOCIATED PRESS
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(17-02-2011, 08:42 AM)Musicwhiz Wrote: Bahrain became a more prominent partner for the Pentagon after the 1991 Gulf War with Iraq. Since then, it has granted US forces increased access, plus permission to store wartime supplies for future crises.
Bahrain is a regional financial and banking hub and has the most diversified economy among Gulf states.
One of the first Gulf states to discover oil, Bahrain was forced to diversify its economy because of limited resources.
Last month, it was named the most free economy in the Middle East - and the 10th most free in the world - by the US-based Heritage Foundation, based on criteria such as economic openness, trade, the efficiency of domestic regulators, and the rule of law.
It is also known for being a recreation ground for residents of Saudi Arabia, who can drive over a causeway to enjoy the Western-style night clubs, bars and beaches of the far more permissive kingdom.
About half of the tiny island kingdom's 1.3 million people are Bahraini. The rest are foreign workers.
Bahrain's domestic politics has long been tangled. The King and the ruling elite are Sunni Muslims.
Free economy, Recreation ground for rich foreigners, Regional banking and Finance hub, Huge proportion of foreign workers, Elites at the top...Is it just me or do I see very close similarities to Singapore...
That aside, I think we're beginning to see the downside of having a very entrenched (read, Big) government. Business and politics are joined common bed-fellows but a system of having 1 man (woman) sleeping exlcusively with 1 woman (man) in a room full of other women (men) makes for very jealous people.
So, what's the better alternative for business when presented with such a political environment? Or is there one?
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