Sunday, 12 May 2013

Sold 220 shares of Yeo Hiap Seng at Unit Share POEMS

I have some odd lots in my stock portfolio.

Some are created by my mistake. 

I participated in the scrip dividend scheme for SP Ausnet.  Scrip dividend scheme is intended to give shareholders a choice to convert their entitled dividend payout to more shares in the company.  The subscription price of the scrip dividend scheme is normally given at a slight discount from the market price, in order to make it more attractive for shareholders to subscribe to the scheme.  Moreover,   shareholders do not need to pay any brokerage/transaction fees to convert the dividends into shares.  So, through my mistake in joining the scrip dividend scheme for SP Ausnet, I have some odd lots in this counter.  I think it would be much better for me to take the cash dividend, rather then figuring out how to sell away the odd lots when I want to sell the counter.

Some odd lots are not created by choice.

1. When SingTel shares IPO in the market, in order to give all IPO subscribers a chance to own the shares, all IPO subscribers were given odd lots of about 200 shares.

2. Some were created by share splits or bonus shares issued.  Example, Hyflux gave 1 Bonus Share credited as fully paid for every 2 existing ordinary shares held by the shareholders of the Company.

3. Some were given free.  Example, Far East Orchard gave existing shareholders some odd lots of Yeo Hiap Seng.  220 shares of YHS for every lot (1000 shares) of Far East Orchard.

I discovered that Phillip POEMS has a platform to deal in odd lots, which is called the Unit Share Market.

Unit Share Market is a market which allows the trading of odd lots in quantity less than the board lot size.  It is a totally different market from the common SGX ready market which is trading on Board Lot.  Board Lot is the standard trading size in the local market which is 1,000 shares except for a few exceptions.

Trading size less than 1,000 shares is termed as 'Odd Lot'.  'Odd Lot' refers to non-standard numbers of shares that arise from stock splits or bonus or rights issues.

Of course, there are buy and sell options.  You can top up your odd lots to standard board lot or simply sell away your odd lots.

There are 2 options for Unit Shares trading on POEMS.

1. "All or None" Order -- Meaning an order submitted must be immediately filled completely.  If this is not possible, the order will not be queued in the system and will be cancelled immediately.

2. "Day" Order -- A buy or sell order will be placed in the queue after submission.  It automatically expires if it is not executed during the day trading session.  However, "Day" order might be partially done.

I tried this Unit Share platform with my 220 shares of Yeo Hiap Seng.  I submitted an "All or None" order, and the order was completed immediately.  I paid the minimum commission of $10 for this trade.

This is a good platform for dealing with odd lots.  However, do take note of the following:

1. If the contract value X 28% > $10, then the minimum commission rate for board lot ($25) is chargeable.

2. Even if the sales proceed is less than the minimum commission rate ($10), the minimum commission will also be chargeable.

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