Harvesting the discount from Share Purchase Plans
When listed companies raise additional equity capital, they typically issue new shares via a placement to institutional investors and undertake a rights issue or a Share Purchase Plan (SPP) for retail investors. These are accessible to all investors who were shareholders of that company on the record date. In August 2019, ASIC increased the maximum application permitted into SPPs from $15,000 to $30,000 per shareholder. SPP Harvester™ provides investors with access to SPPs undertaken by Australia’s largest ASX listed, liquid, operating entities. SPP Harvester™ automatically buys each investor a 1-share position in 300 ASX listed entities. The share is beneficially registered in each investor’s name and held by a trusted, globally recognised, custodian, BNP Paribas Securities Services.
Key benefits of SPP Harvester™ include; the low capital outlay required to acquire 1 share position in 300 companies, competitive transaction costs, and removal of the administrative burden of recycling capital compared to doing it yourself.
When companies or trusts undertake SPPs, SPP Harvester™ applies for new securities at discounted prices compared to the trading price of existing, traded securities. When the securities are allocated by the custodian to an investor’s account and commence trading, SPP Harvester™ automatically sells the new securities, and returns the funds to the investor’s cash account, ready for the next SPP. This allows investors to efficiently harvest the discount and recycle capital through SPPs.
SPP Harvester™ does all the administration and provides a portal for investors to access and review live positions and performance, withdraw and deposit to their cash account and adjust their SPP application if desired.
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