Cory Diary : Exercising Rights Allocated and Access Shares Application using Nominee Account through DBST

This is my first time applying to Exercise my Rights and Excess Shares application through Nominee Account. And I want to have this blogged for future reference.

In Investopedia definition " A nominee account is a type of account in which a stockbroker holds shares belonging to clients, making buying and selling those shares easier."

After selling a chunk of my iReit Global Shares. I am left with 23,000 shares in DBST which works like a nominee account that I would like to try out the experience.

First Step

Receive a notification from DBST in the online Wealth Management Notification Icon. 

 Notification

Second Step

Is important step as any mistake may render application erroneous with unintended consequences.  I heard layout can be different between different brokers and ATMs. So do be very careful and consult your banks or brokers. For my case is as follow.

A) Enter how many shares I like to buy of the entitled shares.

For my case is 10,442. Price at 49 cent. Since the stock as that time is trading at about 71 cents, obviously I like to subscribe all of it. This will cost me only $5116.58 which they deduct later. A discount of $1253 ! as share price lowered to 61 cents.

B) Enter how many shares I like to apply for Excess.

For my case is 60,558. The 558 shares are to round it off to the entitled. It may not be necessary from what I heard but I am not sure. So to play safe I have it make whole. In total I applied 2.63 times excess of what I have. And this cost me $29,673.42.

Kiasu me applied on 2nd Oct which I realised is too early and probably risky because we never know how do market react to the rights issue. And there are rules after you have submitted so I am not going to take any risk to change. Fortunately, nothing serious as the stock price  holds up relatively well and close down around 61 cents.

In total $40,115.42 Cash needed just for the shares to be available for both deductions in my trading/wealth account else  may have problem in the application.

Excess Application

Third Step

As below debit date is15th Oct. In my case the entitled 10,442 shares are allocated to my main holding and cash deducted. Does that mean I can trade the share immediately ? Something to find out ....

Debit

Fourth Step

For my excess application, I get to know on 23rd Oct. Excess 5,558 Shares awarded at 49 cents.

Unawarded remaining cash is returned to my account on same day. What this mean is I gained a delta of 12 cents (Stock price 61 cents) per share which equates to $667. Kopi money !

Finally my total shares count at the end of the exercise is 39,000 Shares. That's 70% increase from initial 23,000 shares holding. hmm hmmm. And a total claim of $1920 from entitled and excess application.

Hope you like my sharing. And as usual DYODD. Warning again ! System application may change over time and process/format can be different between different brokers and ATMs.

Cory

2020-1024

Cory Diary : CPF Life Retirement Study

Key financial thing I have done this month is to do Housing refund 50% to my CPF. Probably will completely pays it off before end of this year. From -2.5% to 4% that's a 6.5% swing from cost to profit.

And this can be done electronically through internet which is what's so amazing about today world. This boost my Pension quite a little for it to compound to age 65 producing a base monthly sum to my future retirement. Which comes to my next investigation on CPF Life.

CPF Life Retirement Study

While I was doing above, it strikes me how much should I put into my RA. Will doubling it provides me double monthly income at age 65 or more ?

As you can see from the estimator almost double. Probably slightly lesser if we try to be a little stingy about it.  The escalating plan is interesting to beat inflation but seems not for me as CPF is not my key dependency ( specific to me ).

While studying it strikes me why would anyone want to choose a Basic withdrawal plan. Not that's it is a lot ( roughly 130 lesser than Standard )? The answer lies with Bequests ( see below chart ).

At age 80, there is almost no money left if we choose Standard or Escalating Plans. However Basic will provide about half the money to beneficiaries upon passing. Now, Basic plan do looks interesting. However doubling the RA Amount initially only double my Bequest. Something I need to watch if I do my step correctly ....

So my preference is Basic 192K for now and depending how I do well in my investment financially, this may change. However once is selected, can't change after 30 days. oh dear. I need to make a note on this.

Watch for any error as I am new to this. As usual DYODD.

Cory

2020-1021

Cory Diary : Repricing Home Loan Package

In a few more months time, my current package will be available to be repriced which was on package based on 2.38% Fixed for 2 years after which FHR8 + 1.88% (0.6%+1.88% =2.48%) where FH is the Period 8 months reference to the column above.

The current DBS Fixed Deposit is as follow.

Since May, DBS announced the FHR8 revision, my total loan repayment has not been reduced s it is fixed package and instead will increase to 2.48% if I do nothing.

What-if I Reprice ?

Per DBS website, home loan accounts are out of lock-in or will be out of lock-in in 3 months’ time are allowed to do repricing. I do not like floating package so will only look into the new reprice Flexi-Fixed package as follow. There is a re-price cost about $300 for Promo.

Fixed in years at 1.5% depending on the flexi-Fixed package which I am interested, follow by FHR24 + 0.9% = 1.8% thereafter. So should I go for 3 Year or 5 Year ? 

That's depend how soon we get over Covid aftermath I guess which could take 2 years. Since there is a free conversion I could ask for contract change per table above if the ever decreasing rate happens once I sign up on the new Contract.

However, if the rate increases then I would want to continue the new contract as long as possible. So looks like 5 years Lock is better option. The 5 years contract states " We will waive the Commitment Fee if such full repayment is made upon the sale of your entire interest in the Property, and no event of default under the Conditions has occurred." (updated).

With the new contract, monthly saving will be $293. That's $3,518 annually. Most importantly is the peace of mind. That's the key point of the plan other than the saving.

Cory

2020-1015