QUOTE(SKY 1809 @ Mar 27 2010, 10:21 AM)
This reinvestment plan is not new, has been practised by unit trust ind for many many years.
The con is you might get odd lots in the end ( correct me if I am wrong ). This would not happen to UT bcos you can sell any numbers of units ( could be a min each time ).
For those intend to reinvest the dividends let say to REITS could find it be more costly now. Extra cost of disposing the units esp the odd lots.
Like you say Basel 3 may lead to less cash dividends to be paid by banks ( the trend )
Even PBB might need to boost up their capital base under Basel 3, guessing only.
off course i know reinvestment plan is not something new..... what i say is Maybank using this scheme in anticipation to Basel 3 is proactive.
but Maybank adopting this plan is a somewhat win win, where it can maintain the div payout ratio, and thru' this plan, the div will be converted into new share, thus the profit is retained and will not errode the Tier 1 capital ratio ( at least not so badly)
i dun mind getting odd lot as i intend to keep for long term, i.e. more than 10 years.
For those who cannot "tahan" odd lot, just go for the cash div than.........
Under Basel 3, everyone need to boost up the capital base, as the Tier 1 capital will be more stringent (now still at consultation stage ).
This post has been edited by mok thye yee: Mar 27 2010, 09:59 AM