LIC & LIT Whitefield Limited SPP

I might not participate, depending on the price before expiry date. WHF yield is < 6% so I could buy MLT or ARG instead. Also I think I have enough WHF for now.

 

Oh I so do. Probably should be modified to be selfish when investing but not so when it comes time to spend the income.

 

As of now I plan to as It’s a modest holding as part of my modest portfolio
Will be comparing it to the adjusted discount to NTA before close to determine if it’s worthwhile

 

Thanks for sharing your decisions everyone!
Yes we’ll participate - it was in our long term LIC investment plan to take up SPP’s at a discount. But won’t do 100% of this SPP as we are in early days and have our own unique financial circumstances.

 

Glad I don't have to stress over this one,it was a smaller holding which I sold a little while ago & decided I didn't want to add to as I liked the idea that others here have of simplifying the portfolio.Really have enjoyed following this post though,good stuff.

 

We will participate. It will increase our WHF holding by about 40% so there is no dilution effect for us. I will take the great mans advice and try to participate in all SPPs.

 

Whf is a holding of ours that we will be adding to by purchasing shares in the SPP.
There’s been some great analysis by @dunno which helps inform us all, but my theory is KISS which helps me somewhat ‘mindlessly’ accumulate and block out the noise.
My hardest decision lately was whether to go to page 4 or 5 on the thread to catch up on some posts

 

Just so you know WHF recently forecast for a yearly dividend of 19.75 cps which is a yield of over 4.5% on the SPP price or 6.4% gross.

 

Thank you @Snowball!

 

Does anyone sell a parcel of shares equivalent to the SPP allocation to bag the difference?
Eg Sell 3480 shares @ $4.55 and buy 3480 in the SPP at $4.31 and nett the difference $835.20 (less brokerage).
I am not looking at doing this just interested in others thoughts.

 

Used to a long time ago but don’t bother anymore. I had a instance of the SPP being cancelled once and then there’s the possibility of the offer being oversubscribed at times. So there are a few things to be aware of. However I doubt this will be the case with WHF’s SPP.

@Ianvestor I think is still active in this area so hopefully he will see this and might be able to provide some ideas. It can at times be a very low risk trade for some quick dollars.

 

In addition to other comments it may be worthwhile to also factor in the potential loss of about $690 in dividends (before franking) if the forecast holds true against a one-off CG.

 

Thanks SatayKing yes you would have to count the loss of dividends.
I calculate this at $339.30 franked for us in accumulation.

 

Thanks Nodrog - unforeseen consequences.
My talked very briefly about doing this, then soon talked himself out of it.

 

I would just say in some cases it is worthwhile to contemplate, but I haven't done this specifically very often.


If a SPP is well "in the money" but maybe you don't like concentrating your holding in one stock too much. You have to look at specific factors, dividend dates and what qualifies, tax consequences etc if it may be worthwhile on an individual level.


Just wondering Nodrog have you had much experience with a SPP being scaled back? Or even cancelled if for example the NTA surged all of a sudden and they don't want it to be so dilutive?


I've thought in the back of my mind the chances of that are near zero, but there could quite easily be examples of it that I don't know?


What personally I do sometimes when exiting a LIC at a premium to NTA is leave a tiny holding in different accounts. These days I don't find it any burden with tax reporting. For example I have tiny holdings in PAI, PMC & WAX. These come to mind where I felt there could be possibilities of SPPs that are "in the money" in the future.


Too much stuffing around probably for most. Maybe I am just a tight a$se with too much time on my hands!

 

Sadly I'm still prone to fiddling which led me to sell 3480 @ $4.57, for a net $873 after brokerage.

The half year Divy is 9.75c potential loss of $339.30 before franking credits, $485 after FC. which I benefit from.

Bottom line $388 profit for a few clicks of the button, stops my holding being diluted and as @dunno has said adds up over 10 years.

 

@Ianvestor said:

It was a very long time ago. It has happened albeit uncommon but I can’t remember which LICs they were and the circumstances.

I recall ARG or AFI? cancelling a SPP a few years ago as I think is was a set price only option without the alternative of avg weighted price. The market had dropped quite a bit so there would have been no interest in it so it was cancelled. No damage done in this instance of course.

@SatayKing might remember some instances?

 

From the half-yearly reports released today, all other things being equal, WHF expects to increase its final dividend to be paid in June 2019 to at least 10 cents per ordinary share.

Read more here: https://www.asx.com.au/asxpdf/20181115/pdf/440b73b7ts16k2.pdf

 

Yep, good to see but this doesn't come into play when selling now and receiving the SPP