So I think now that the whole Singapore financial blog world is talking about this preference shares offering, I would like to briefly share my decision and views.
- Why would a company issue preference share at 6% to retail investors and institutional investors? I ponder this for a long time and came to the conclusion that they are too heavily geared currently and no bank would want to lend them at 3-4% any more. The logical thing is to provide a premium and market it to the public
- The public, starved at very low interest rates, yearns for these kind of safe higher yielding assets. It would be easy to market to them. And judging by the response people are more receptive to this than HPH.
- Preference shares have much lower volatility. This will be very attractive to retirees who wants predictability and reasonable returns.
- Preference shares do not have ...
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