Question: If a share goes ex dividend on (say) 15 May and I put in a sell on that morning before the ASX opens would I still get dividend?
Answer (By Paul Rickard): If a company goes ex-dividend on 15 May, all trades on the ASX on that day will be processed as “ex-dividend”. Normally, the share price will adjust for the change in status. Take NAB as an example, which is paying a 99c dividend. If NAB shares closed at (say) $30.00 on 14 May, all things being equal and barring other market influences, you would expect NAB shares to trade around $29.00 on 15 May.
Question: Why is IOOF (IFL) being devastated? Is it a mirroring of AMP?
Answer (By Paul Rickard): I think you answered it yourself – a flow on from the Royal Commission and the AMP effect. Also, a broker downgrade from UBS, which dropped its rating from buy to neutral and cut their target price from $11.50 to $10.00. Rationale for this was largely flow on implications from the Royal Commission.
Question: What’s the view on Macquarie Capital Notes 3 versus just buying their shares?
Answer (By Paul Rickard): They are totally different propositions. While both have equity characteristics (you could lose most or all of your capital), only Macquarie ordinary shares have any upside potential. There is absolutely no potential for long-term capital growth on Macquarie Capital Notes.
I think of Macquarie Capital Notes as being part of my “risky fixed interest” portfolio.
There is an old saying in investments – if you don’t understand it, don’t invest in it. ASIC’s MoneySmart website has some quite good material on hybrid securities – you can access it on this link.
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 regard to your circumstances.
