TLDR; If you do not own Keppel (SGX:BN4), you can stop reading. If you have them on 23 Feb 2023, you can either accept this event or handle it yourself with the recommendations below.
For every 1000 shares of Keppel that you have on 23 Feb 2023, you are expected to get 191,000 shares of Sembcorp (SGX:S51). See SGX announcement. Several users have asked how to handle this in this forum thread. Therefore, I decided to share this in a post for wider reach.
There are different ways to handle this but I personally recommend the following two ways.
Stock split style [Recommended]
- Sell Keppel at the market value on 22 Feb (i.e. price = 7.34).
- Buy Sembcrop at market value of 22 Feb (i.e. price = 0.134, shares = 19.1 x #Keppel shares) on 23 Feb.
- Buy Keppel back (at price = 4.7806). Note: price is 4.7806 because 7.34 – (19.1 x 0.134).
Adjustment: I do recommend that you adjust both the shares of Sembcrop that you receive and also the buy back price of Keppel based on actual number of Sembcorp shares you received. It can be different due to rounding down (i.e. not exactly 19.1 multiples of Keppel shares you own) and actually the real number is 19.085033835 (see announcement)
Also, I have created an event for users to do one click handling of this if you think this stock split style make sense to you.
Scrip dividend style
- Create a dividend override for Keppel (SGX:BN4) worth 2.5594 per share with ExDate 23 Feb and PayDate 23 Feb (How to Override Dividends – StocksCafe Academy 1)
- Create a buy transaction of 19.1 shares of SembMarine (SGX:S51) on 23 Feb at 0.134 for every share of Keppel (SGX:BN4) that you own.
Adjustment: I do recommend that you adjust both the shares of Sembcrop that you receive and also the buy back price of Keppel based on actual number of Sembcorp shares you received. It can be different due to rounding down (i.e. not exactly 19.1 multiples of Keppel shares you own) and actually the real number is 19.085033835 (see announcement)
This is another way to handle the event. However, this means your Keppel cost will be higher and it is compensated by the dividends received.
Happy investing!
