Affiliate Ads support this blog:

Sunday, 14 June 2009

ANZ SPP - a windfall?

DS1 and I both received the paperwork for the ANZ Bank's Share Purchase Plan. The maximum application amount is $15,000 and the share price is a maximum of $14.40 per share (it's unlikely to be less than this as the current share price is 20% above that level). I have around $20,000 worth of ANZ in my leveraged equities portfolio and will use the cash realised by the wind-up of the Commonwealth Diversified Fund (CDF) to apply for the maximum amount. If there isn't any scale-back, and the share price remains close to it's current level, that will produce an immediate windfall profit of $3,000.

DS1 is likely to do even better from this SPP. He currently has $4,750 worth of ANZ shares, and has $1,000 spare cash sitting in his St George Happy Dragon account (earned from busking) that he wants to use to buy some more ANZ shares via the SPP. I think I'll lend him another $14,000 as a short-term loan so he can also apply for the maximum allotment. If he's lucky and gets the full $15,000 worth of ANZ SPP shares issued at $14.40 he can sell enough surplus shares to repay my $14,000 loan a few weeks later. Depending on how the price moves between now and when the SPP shares are sold, he may end up with an extra $3,000 of 'free' ANZ shares in his portfolio.

I'll borrow the $14,000 to lend DS1 from my St George Portfolio loan account (5.10% current interest rate).

Subscribe to Enough Wealth. Copyright 2006-2008

1 comment:

Anonymous said...

A similar thing happened with MQG: easy 20% profit on the day. It's one nice bonus for having a direct shareholding.

It's not quite risk-free, because the price could have dropped between the date the price is locked in and the date they're delivered. But it's close.