Question: Should we take up the Macquarie Bank share offer? Considering the share price was in the mid $70 range a couple of weeks ago, the offer price does not seem such a great deal.
Answer (by Paul Rickard):
Yes, you do need to take a view on Macquarie, and in that, consider recent trading history.
That said, Macquarie has been a real performer this year and their half year result surprised on the upside.
The shares under the share purchase plan are being offered at a price of $78.40 (effectively $80.00 on a comparable cum dividend basis). You are also protected on any immediate market downside in that you will pay no higher than $78.40 or the weighted average trading price (less a 1% discount) between 11 November and 17 November.
Notwithstanding it is no bargain, I think I would follow the lead of the institutional market and subject to cash needs, apply for the maximum amount ($10,000).
Question: I believe that you need to hold a stock for 47 days to receive franking. Does this mean 47 days before the stock goes ex div., or 47 days in total?
Also, I own some Genworth Mortgage. They paid an extra dividend a few months ago and I think they are doing a share buy back soon. To my mind, this shows really good financial health. Should this give me confidence for the future?
Answer (by Paul Rickard):
You need to hold the shares for at least 45 days. To get the dividend, you must own the shares on the day immediately before the day the stock goes ex dividend – apart from that, it is not specific as to whether it is 45 days in advance or arrears or some combination thereof – it must be at least 45 consecutive days (including the ex date).
With Genworth, the on-market buy back will help.
Sorry – not a fan of their business (or stock). Self-insurance options for the major banks, plus higher default rates as the property market takes a breather.
Important: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. Consider the appropriateness of the information in regards to your circumstances.
