- Current Price on 8th Jan 2015 = S$106.05
- Interest = S$6.00 per share
- Yield = 5.618%
- Credit Rating = None
Investment till Callable Date
- Tenure = 3.5 years
- Total Interest = $21 per share
- Capital Loss = $6.05
- Overall Return = $14.05
- Overall Annual Yield = 4.028%
Hyflux Preference Shares was one of my holdings when I first have my cash reserves. With an interest of 5.618%, it is one of the best in SGX which is S$ denominated. (Olam is better but it is US$). However, it is priced at 6% premium which is tricky. Therefore, the overall return will be only 4.028% if it is held till maturity.
My strategy would be to use this as a one-year bond. That means to purchase it now, earn 5.6% interest, pay about 0.50% transaction cost (which means a net of 5.1% return) and sell it after 12 months. Of course, there is a risk that its price will drop but with a historical fluctuation of 3%, it is worth a try.
Increasingly, I am setting some of my criteria. One of which is that it needs to have a remaining tenure of at least 3 years to provide some price stability to it.
My strategy would be to use this as a one-year bond. That means to purchase it now, earn 5.6% interest, pay about 0.50% transaction cost (which means a net of 5.1% return) and sell it after 12 months. Of course, there is a risk that its price will drop but with a historical fluctuation of 3%, it is worth a try.
Increasingly, I am setting some of my criteria. One of which is that it needs to have a remaining tenure of at least 3 years to provide some price stability to it.
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