Saturday, 22 June 2019

Frasers Centrepoint Trust Preferential Offering

FCT is one of my "medium" size holdings in my portfolio It is a counter that I have been holding since the Great Financial Crisis. It has done very well and given me capital gains and regular dividends. Most of my FCT holdings are in CPF as I believe it was one of those that rarely had rights issues (rights issues are a hassle for CPFIS investors- more on this below).

2019 appears to be the first time in my 10+ years of holding the counter that it has embarked on a rights issue/preferential offering, presumably to buy Punggol Point. And unlikely highly dilutive issues like OUECT, the FCT preferential offering was merely 31 units for every 1,000 at the price that was reasonably close to the market price (at least, when compared to something like OUECT).

I was pleasantly surprised when I received all the excess rights that I applied for, which indicated that quite a few investors failed to apply for their rights. For CPF, there were huge problems with the timeframe - CPF investors like myself got the CPFIS letter 1 day before the deadline. I had to call the bank and fortunately they indicated that applications by fax would be accepted. 

Even more fortunately, I have a 5-year old multi-function Samsung printer that still has a fax function (I wouldn't be surprised if newer models have no more fax function).  I wonder if this caused some CPF investors to forgo their rights (if they didn't manage to send in their applications in time).

One thing I learnt about CPFIS. You are charged by the CPFIS bank (in this case OCBC), for every 1,000 excess rights that you apply for even if the application is not successful.

CDP: Entitled to only 124, applied 876 excess and got all 1,000.

CPF: Entitled to 713, applied 1287 excess and got all 2,000

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