selling shares

digannio

I wonder if anyone can help with a question over selling shares. I have got some that pay a quarterly dividend which I reinvest back in rather than take the income. I'm looking to sell the shares and there is a distribution date of November 30. They were ex-Divi in October. If I sell now would I lose the extra shares that will be due in ten days or would they be included in the sale automatically as they were held on the ex-D date. I can't seem to get a definitive answer and any help appreciated.

calypso_rhapsody

I believe that (unless the registrar will allow you to change your reinvestment option and send you the divi in cash) you will get the extra shares on 30 November and would then have to sell them separately - thereby incurring more fees.

digannio

Thanks for the help with that.

Biggles

digannio wrote: »

I wonder if anyone can help with a question over selling shares. I have got some that pay a quarterly dividend which I reinvest back in rather than take the income. I'm looking to sell the shares and there is a distribution date of November 30. They were ex-Divi in October. If I sell now would I lose the extra shares that will be due in ten days or would they be included in the sale automatically as they were held on the ex-D date.

You'd get the extra shares. But if you sold now, you could only sell your existing holding and you would be stuck with the shares that were issued in lieu of the dividend, which you would have to pay a second dealing commission to sell.

It might be better to wait until the extra shares are in your account in ten days time.

digannio

Thanks Biggles. I did want to sell them now but from what you say I guess it's best to leave it a few more days to avoid the complications.... and extra cost!

Biggles

digannio wrote: »

If I sell now would I lose the extra shares that will be due in ten days or would they be included in the sale automatically as they were held on the ex-D date. I can't seem to get a definitive answer and any help appreciated.

The point of the ex-div date is that, after that date, you can only sell them ex (ie without) the dividend, so the buyer doesn't get the divi, it stays with you.

If you hadn't opted for scrip dividends, the divi would be paid to you in cash on 30 November, despite the fact you no longer held the shares. But, unless it's too late to change your option, you're probably best waiting till the divi is converted to shares, which might be a couple of days after the due date.

digannio

Thanks for clearing things up. I'll keep watch in my account and sell as soon as the extra shares drop. Although if the Great Crash of 2013 happens to strike in the next ten days, perhaps I'll put things on hold for the next couple of years or so!!