HOW TO USE THE TABLE
REMEMBER THAT hot EDS are entitled to all the benefits received by ordinary shareholders – including all the dividends. An investor who buys sbkihd now on the JSE at 4000c will receive the full interim dividend of 193c/share on 22 September recently declared by Standard Bank. That alone is already nearly 5% on the hot EDS. Add to that the final dividend of 230c that will be paid in April next year and the dividend yield is more than 10%, while the investor also shares in Standard’s capital appreciation, exactly like ordinary shareholders.
Most of the hot EDS in the list will run until May next year, when they’ll be rolled over into new instalment shares. If the price of the underlying share has improved well the investor will receive more of the new hot EDS than his exist- ing shareholding: for example, 110 for every 100. If the price of the underlying share falls over that period he’ll receive fewer new instalment shares.
Keep your eye on the knockout price. It’s better to sell hot EDS before the ordinary share reaches its knockout price. By selling, the investor also still recovers part of the interest paid to the bank.