SPP - Whats coming up

[Ponda]

The purpose of this thread is hopefully going to be two fold with the aim of:

1) Having members sharing knowledge of upcoming SPP (Share Purchase Plans) and
2) Identifying any NZ Broker that informs clients of up-coming SPP's.

I believe that SPP's have potential to make a decent amount of money with very limited risk.

1) I have been made aware of at least 10-15 SPP's that have been available on the ASX this year. Quite often the record date is set for a future date. This then gives me the opportunity to purchase the initial holding prior to record date.

There are a number of companies that have the record date that has already past and so there is no opportunity to get involved with the SPP.

2) I have an Australian broker who emails me whenever a SPP is announced. I am trying to find a NZ broker who offers the same service. The broker that I use has an account for me and uses that to purchase the initial holding. They will then sell after the record date. If, after my instruction I decide to continue with the SPP they will purchase the $5,000 parecel and will either sell it after the shares have been issued or they will hold the shares until instructed to sell it.

I have not been able to find a NZ broker that will do the same service.

Basically they will only inform me if I have already have shares in XYZ company, if I don't have a holding then they won't.

I look forward to your comments.

[shasta]

The purpose of this thread is hopefully going to be two fold with the aim of:

1) Having members sharing knowledge of upcoming SPP (Share Purchase Plans) and
2) Identifying any NZ Broker that informs clients of up-coming SPP's.

I believe that SPP's have potential to make a decent amount of money with very limited risk.

1) I have been made aware of at least 10-15 SPP's that have been available on the ASX this year. Quite often the record date is set for a future date. This then gives me the opportunity to purchase the initial holding prior to record date.

There are a number of companies that have the record date that has already past and so there is no opportunity to get involved with the SPP.

2) I have an Australian broker who emails me whenever a SPP is announced. I am trying to find a NZ broker who offers the same service. The broker that I use has an account for me and uses that to purchase the initial holding. They will then sell after the record date. If, after my instruction I decide to continue with the SPP they will purchase the $5,000 parecel and will either sell it after the shares have been issued or they will hold the shares until instructed to sell it.

I have not been able to find a NZ broker that will do the same service.

Basically they will only inform me if I have already have shares in XYZ company, if I don't have a holding then they won't.

I look forward to your comments.

Ponda

What you are asking is basically the difference between an online DIY & full broker system.

If you ring your broker & pay higher fess im sure they will email you.

Normally "selective" clients get send notification of a new issue, depends how much stock the brokers sign up for i guess.

Case of what you pay for is what you get!

[NOCASH]

Oh great, that is what i'm going to do with SKC ( SKY CITY ) they are offering 2.61$ a minumin of 1000$ max 12,000$, i'm going to buy once they allot me the share, will be be selling straight away currently trading at 3.01

[shasta]

Oh great, that is what i'm going to do with SKC ( SKY CITY ) they are offering 2.61$ a minumin of 1000$ max 12,000$, i'm going to buy once they allot me the share, will be be selling straight away currently trading at 3.01

Nocash

Due to the dillution of the extra shares the SP tends to head back towards the offer price.

You'd better be quick!

[Ponda]

Thanks Shasta,

I'm more than happy to pay for the service. I live in a small provincial town and have been to all of the brokers that we have up here and none of them offer the service, in fact, they didn't even know that they could access that information. Maybe it is just 'too hard'. Thats why I was questioning as to whether anyone knows or uses such a service.

Thanks

[shasta]

Thanks Shasta,

I'm more than happy to pay for the service. I live in a small provincial town and have been to all of the brokers that we have up here and none of them offer the service, in fact, they didn't even know that they could access that information. Maybe it is just 'too hard'. Thats why I was questioning as to whether anyone knows or uses such a service.

Thanks

I use the most simple ASB Sec online service & have done for years.

I bank with them & it has all i need.

Sometimes people like to complicate things, for the sake of it!

[Ponda]

Shasta
"Sometimes people like to complicate things, for the sake of it! "
(I don't yet know how to put quotes in)

I must apologise. I thought that this sub forum is named "Investment Strategies" as it allows others to discuss differant strategies that are avialable in the market place and as this is a sharetrading forum I believed that it was an ideal place to have such a discussion.

Most people have differant risk management, time available, money available etc, etc the list is almost endless.

The SPP startegy could be ideal for someone out there who can only invest 15 minutes on their portfolio, yet have the benifit of financial growth. Wouldn't it be great for those people to come home, check their emails and see that there is a SPP coming up for XYZ company and that the last day to buy the qualifying parcel is four days away. They can contact the broker, say yes please and can you sell my qualifying shares after the record date. They then wait and see what the spare price is when they have to decide if the want to partake in the SPP, i.e. is the share price above or below what the offer is. If they want to proceed they contact their broker and say yes please. Then in 10 days or so when the shares have been allocated they are able to sell their $5,000 worth of shares with some profit.

It's just another way of trying to increase wealth that I am keen of letting other people know about.


The below quote (author unknown) is quite mind opening. Think how many things are in the last category. You won't be able to because you don't know about them. What if SPP's are in that category for some.
"Things you know you know, things you know you don't know, things you don't know you don't know"

Hope you have a great day

[dragonz]

You might find this service of interest

http://www.asx.com.au/professionals/market_information/comnews.htm

[Ponda]

Dragonz, thanks for that. I will have a look at it


Below is a quote from another thread from Lawso.

As can be seen from the quote you needed to be on record prior to the announcement, so in this case we couldn't be in unless we were already holders.

I am waiting for one that the record date is in the future so that we are in a position to purchase and be there for the record date.

As can be seen from the XRO SPP there is often a lot of money to be made from SPP's. In the case of XRO if you purchase your $5000 and sold at todays price (yes, I am aware that the price may come back and a few other considerations) you could make a cool $3,500 for very little risk.

With Lawso's example: If there is no scale back, if the price stayed the same $3.03 you could return $1,200.

QUOTE=Lawso;255391]FRE is the latest to announce details of its SPP capital-raising plan. It opened on Monday for holders recorded the previous Friday, 8th. Closes May 28 and allotment on 5 June.
The issue price is $2.44 (current sp $3.03).
The snag is that after placing $45m with the instos they're only looking for $5m from other shareholders. We're invited to apply for a maximum of 5122 ords (roughly $12,500 worth). I don't know offhand how many shareholders are on the register but it would take only 400 holders applying for the maximum $12.5k worth to absorb the $5m so it's odds on there will be heavy scaling back. Seems a bit loopy to me.[/QUOTE]

[Ponda]

GrainCorp Limited (GNC.ASX)
Current price $7.30
SPP Price $6.25
Last day to buy is 22/05/2009 to get on the register.

DYOR

[Lawso]

Hi Ponda.
A couple of points: 1) You should note shasta's warning that because of dilution the market price can fall back towards the offer price. But this certainly hasn't happened with NPX, whose current sp of 46 is exactly twice the SPP price. At 7 for 1, it's showing a great return.
Secondly, be aware that, on top of brokerage costs, habitual buying and quick selling could attract the attention of the vultures at IRD.

[Ponda]

Thanks for that Lawso.
With most of the SPP's that I have followed or been involved with, there has been a handsome return and the dilution has been a factor but over the average it has been good returns.
The bokerage factor isn't really a big problem either as most SPP's do not come with bokerage fees in purchasing the $5,000 worth. It does when you purchase the initial holding and when you come to sell the lot i.e
Company XYZ announces SPP and record date is in the future (so I can purchase and qualify)
Purchase
$500 + bokerage ($30) = $530
$5000 SPP shares (no bokerage)

Selling
$500 + $5,000 shares (= $5,500) + brokerage ($30)

So you end up only paying one lot of brokerage as you do anyway.

2) There is no requirement to sell the shares immediately and you can hold them for as long as you like if you don't want the IRD to start looking into your books.
I have set up a company for sharetrading and any profits are taxable and I am more than happy to fund the public service as our mighty Government chooses.

I just find that SPP's are like any other investment with the market and being able to limit your risk makes it more advantageous to the investor.