THE SORRY TALE OF INVESTMENTS IN PREFERENCE SHARES
SINCE APRIL LAST YEAR, just after the dividend for the previous six months had been paid, the price of PSG preference shares fell from 108c to 88c. At the same time the prime-lending rate increased by one percentage point and the dividend on PSG’s preference shares rose accordingly.
The question that the prospective investor should ask is whether that fall from 108c to 88c – which effectively pushes the return rate on those preference shares up from 9% to 11% – doesn’t fully compensate the investor for the uncertainty concerning dividend tax, or whether PSG will compensate the preference shareholders.
I have an investment in PSG preference shares, and I’m looking for an opportunity to supplement it.