ASX Shares Can Mr Joe Citizen buy in a capital raise?

Discussion in 'Shares & Funds' started by Jmillar, 28th Apr, 2020.

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  1. Jmillar

    Jmillar Well-Known Member

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    Don't shoot me down as I'm just a noob.

    Can Mr Joe Citizen put $1,000 into new shares being offered in a capital raise? I'm guessing there is a sizeable lower limit given the shares are offered at a discount to the previously traded price.

    Thanks
     
  2. Trainee

    Trainee Well-Known Member

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    Wrong question. Capital raisings are generally only offered to existing shareholders and institutions.

    you should be asking can non shareholders participate in a retail capital raising? Unlikely.
     
  3. mdk

    mdk Well-Known Member

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    Yes, however you must already own the shares who are doing the capital raising at the time of announcement. Eg, I don't own NAB share directly (do own them via an ETF and some LIC's I own) so I cannot participate in it. I have a friend who holds them directly, so he can decide if he wants to or not.

    Typically you can buy in amounts of $1000, $2500, $5000, $10,000 up to $30,000.
     
  4. Jmillar

    Jmillar Well-Known Member

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    Thanks. And how do you do it?

    For eg I own NAB shares.
     
  5. mdk

    mdk Well-Known Member

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    Eligible shareholders will be sent out a share purchase plan (SPP) booklet/email. If you decide to participate you'll bPay one of the amounts on offer within the offer window. There's no brokerage. In the following month or so, you're new shares will be allocated.

    All details will in the the SPP they send you.
     
  6. Fargo

    Fargo Well-Known Member

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    You can log on to your share registry and get a Bpay code and reference number by clicking on the links. By Bpaying you are deemed to have accepted the terms and conditions The amount you pay will determine the max shares you get, if their is a scale back or you overpay, some funds will be returned to the account nominated on the register, it may not go back to the account it was paid from. You can phone them to get a Bpay number, You can print the form and send a cheque or wait till it comes in the mail with the purchase plan.
     
  7. JBC

    JBC Member

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    I am also a noobie, could someone please explain to me how NAB announced on 27/4/20 that they were offering securities to raise approx $3B, and by the next day it was announced that it was done? sounds to me like it was organized well before the announcement? Is that legal? Wouldn't that potentially affect share prices?
     
  8. Gockie

    Gockie Unicycle - get exhausted but never two tired Premium Member

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    I’d like to know too.
     
  9. wombat777

    wombat777 Well-Known Member Premium Member

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    Capital Raises are only offered to sophisticated investors and institutions. You need to pass an income or asset test to qualify.

    Certificates issued by a qualified accountant | ASIC - Australian Securities and Investments Commission

    If you are an existing shareholder in a company then any retail investor can participate in Rights Issues or Share Purchase Plans.
    • Rights issue - this is a formulaic approach - you can buy up to 1 share for each N shares held
    • Share Purchase Plan - this gives existing shareholders an opportunity to subscribe for a share offer of a $ amount of shares
    Share Purchase Plans are sometimes done in parallel to or just after a Capital Raise.

    Often though retail investors miss out on the same sort of cheap "wholesale" deals that Professional/Sophisticated get access to.
     
  10. JBC

    JBC Member

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    Thanks wombat, but my concern is that the prices could be manipulated by large institutional investors to lower the share price at which the raising is offered, should they be made aware of it well before it is officially announced. It would seem that in the case of NAB at least, that the shares were sold before the offering was announced, raising the question.
    As I stated, I am a noobie to the game, but would love to know if I am missing something.
     
  11. Never giveup

    Never giveup Well-Known Member

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    I own NAB shares that I have bought a while back using my own money. Now I am doing equity pull Nd want to use the monesy to take part in SPP....how will the divis, future tax componemt will work given NAB shares be under same chess account/hin # ...

    @Terry_w - seek specific tax advise or possibility for you to add any generic info?
     
  12. Trainee

    Trainee Well-Known Member

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    Shares purchased on the spp shoul be the same as ordinary shares. No different to if you bought them on market.
     
  13. Never giveup

    Never giveup Well-Known Member

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    I want to use $$$ pulled drom my PPOR to do debt recycling so interested to know the tax calculation parts..

    E.g. current holding of nab shares 200 using own money.

    SPP 30K - Tax can be claimed butbwhen it comes to divis - I want to know the sepration part- will it be straight forward calculation?
     
  14. Trainee

    Trainee Well-Known Member

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    Dont understand. What do you mean by tax can be claimed? Interest? Depends. Money coming from redraw? Or Offset?

    dividends are income. You have to declare as income.

    Keep all the documents and leave it to your accountant. You dont understand enough to do it yourself.
     
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  15. Never giveup

    Never giveup Well-Known Member

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    Lol

    As I said pulling equity that means I am refinancing my home loan (PPOR) and using that money to buy shares.
     
  16. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

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    If you borrow to buy income producing shares the interest would generally be deductible - as long as you do it right.

    it doesn't matter if you already own some of the same shares.

    But it could matter if you sell some but not all of the shares as you would then need to work out if you sold the ones borrowed for or not
    Tax Tip 148: CGT and Different Parcels of the Same Shares Tax Tip 148: CGT and Different Parcels of the Same Shares
     
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  17. Never giveup

    Never giveup Well-Known Member

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    So for simplicity if selling sell all and then sepraye the inveatment done with borrowed money.

    Re your.comment about as long as you do it right.:
    Do you think it be more beneficial if I open a new chess account from scratch with likes.of selfwealth to avoid mixing ?

    Secondly, can one peraon have multiple chess/hin acvounts?
     
  18. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

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    There is no issue with different trading accounts and claiming interest