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Online Share Trading

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Do you choose Dividend or Capitalisation Share?

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Frequent Contributor
A. "will be entitled to receive an interim gross cash dividend of 25 cents per ordinary share (Cash Dividend)" If you have 1000, Dividend is 25c *1000 you receive R250.00. B. "shareholders have a right to elect to receive new, fully paid, ordinary, shares in the Company with a par value of 2,5 cents each (Capitalisation Shares)" Cap is 2.5 * 1000 you receive R25.00. Can't be?? C. "The ratio of Capitalisation Shares that may be applied for in terms of the Capitalisation Issue is 1.45413 Capitalisation Shares for every 1000 ordinary shares" 1 *1.45413 * todays price 16.00 you receive R23.26. Can't be. Do I multiply B * C = R581.50? Please help!
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17 REPLIES 17
Valued Contributor
you get 1.45413 shares for every 1,000 you hold .. or in simple terms 0.00145413 for every one share you have .. at 1600c that equates to 23.26608 cents per share
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Super Contributor
At the current price, it is better for me (with 40,000) shares to take the cash payment rather than the shares...
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Not applicable
instead of a dividend - interesting idea, I have not seen that before. Does that mean you are not subject to DWT if you take the option?
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Frequent Contributor
The Capitalisation Issue is not subject to DWT in terms of the Income Tax Act, but the subsequent disposal of shares obtained as a result of the capitalisation Issue is likely to have income tax or capital gains tax (CGT) implications
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Frequent Contributor
No! 1.45413/1000 is 0.00145413 shares per share correct, but multiply by 1600c = 2.3266c per share. Back to 1000 shares = 2326.6c or R23.26. Wheras the dividend for 1000 @ 25c per share is R250. Or am I wrong?
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Super Contributor
Number of shares x share price divided by 1000 equals about 23 cents per share.
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Super Contributor
Remember that your capitalisation shares will be carried at zero cost for income tax - so when it comes time to sell you will pay tax (CGT or IT) on this amount (ie the 23c.) SO - in the end - you will pay tax on the dividend amount.
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Super Contributor
Remember that your capitalisation shares will be carried at zero cost for income tax - so when it comes time to sell you will pay tax (CGT or IT) on this amount (ie the 23c.) SO - in the end - you will pay tax on the dividend amount.
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Frequent Contributor
Ha! A correction arrived. "The correct ratio of Capitalisation Shares that may be applied for in terms of the Capitalisation Issue is 14.54127" With attention to detail, and poor mathematics like that, no wonder this company took a hammering. I'll have my money thank you.
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Super Contributor
That disclosure came out a while ago. What do you make of the news that PIC is now a 15% shareholder?
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Valued Contributor
haha, that's getting a mention in my show this week
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Super Contributor
But here ABL is perfectly correct - the capitalsation issue ratio could only be determined finally upon expiry of the value-weighting trading period as specified. The preliminary figure was released subject to change in the interest of transparency. The final figure is for 25c as represented by x shares trading at the nine day weighted traded value for the period ended at end May. This is in accordance with best practice!
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Valued Contributor
no, they had the decimal point int he wrong place, it did change right at the end of the numbers, but still an error
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Super Contributor
OK - So they corrected the corrected figure... oops.
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Regular Contributor
Looking good to go back up to R20 Any thoughts on this one
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Frequent Contributor
Gee! Thanks for the fame Simon. Can you believe I live in China and was listening to your show, which I don't often manage to do, and was totally surprised to hear my name. Well worth the loss ABIL caused me.
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Frequent Contributor
Gee! Thanks for the fame Simon. Can you believe I live in China and was listening to your show, which I don't often manage to do, and was totally surprised to hear my name. Well worth the loss ABIL caused me.
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