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Online Share Trading

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Scrip distribtion

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Quakedog
Super Contributor
Please can someone explain how the scrip distribution works? My old lady has some shares and now she wants to know what this scrip dist. is and how it works I dont have a clue? What should she do?
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2 REPLIES 2
Werner_1
Super Contributor
Have you recieved or seen the distribution circular sent out? you can view it here: http://www.standardbank.co.za/SB_FILES/Investor/Distribution_circular.pdf - i havent read it yet, but maybe it explains in more detail what the plan is. i think it is basically that SBK wants to give dividends in form of shares so that they can keep the cash to increase their cash position as opposed to paying the dividend out in cash and not having the ability to utilise the cash. (i could be wrong, then please correct me guys)
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geordie1
Super Contributor
Basically they offer you the alternative of having shares instead of dividend-there may be a tax saving by doing this so hopefully shares will be at a discounted price to surrent market value.If you regard shares as cheap at moment and there is a further discount then script instead of div could be attractive.If you think share is overpriced then div is more attractive-your choice.stu
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