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  • FIRST POST
    • aroominyork
    • By aroominyork 17th May 18, 4:18 PM
    • 517Posts
    • 169Thanks
    aroominyork
    Baillie Gifford Shin Nippon
    • #1
    • 17th May 18, 4:18 PM
    Baillie Gifford Shin Nippon 17th May 18 at 4:18 PM
    I received an email today that BGS shares are going to be subdivided 5 for 1. Why do they do this?

    I then googled for news on BGS and found this https://monroereporter.com/baillie-gifford-shin-nippon-plc-bgs-l-rci-trending-towards-a-reversal/63680/. I wouldn't know how to start interpreted this except that it suggests that if BGS rises much more it will trigger investors (or machines?) to sell. Are these theories credible? Being an IT I expect that any sales it would not affect the NAV and could only reduce the premium - is that right? - and if so is there any experience of how much these auto-sells affect premiums?
Page 1
    • Asghar
    • By Asghar 17th May 18, 4:24 PM
    • 182 Posts
    • 105 Thanks
    Asghar
    • #2
    • 17th May 18, 4:24 PM
    • #2
    • 17th May 18, 4:24 PM
    It's nothing to worry about, shares split's are normal and in this case it makes the lower share price more appealing to buyers.

    Already a thread started here.
    https://forums.moneysavingexpert.com/showthread.php?t=5842804
    • bostonerimus
    • By bostonerimus 17th May 18, 4:40 PM
    • 2,037 Posts
    • 1,356 Thanks
    bostonerimus
    • #3
    • 17th May 18, 4:40 PM
    • #3
    • 17th May 18, 4:40 PM
    Ahh stock splits. If you don't do it you might end up like Berkshire Hathaway A; they cost $300k/share.
    Misanthrope in search of similar for mutual loathing
    • ColdIron
    • By ColdIron 17th May 18, 5:05 PM
    • 4,342 Posts
    • 5,527 Thanks
    ColdIron
    • #4
    • 17th May 18, 5:05 PM
    • #4
    • 17th May 18, 5:05 PM
    Stock splits can make shares more accessible and increase liquidity but at their current price I'm not sure the effect will be as dramatic as it would be for higher priced shares. Spreads etc will be smaller but proportionate. Still, nothing to be concerned about

    BGS 10
    BATS 38
    PNL 394
    BRK.A ~ 2,200
    • Alexland
    • By Alexland 17th May 18, 7:29 PM
    • 2,751 Posts
    • 2,095 Thanks
    Alexland
    • #5
    • 17th May 18, 7:29 PM
    • #5
    • 17th May 18, 7:29 PM
    Ahh stock splits. If you don't do it you might end up like Berkshire Hathaway A; they cost $300k/share.
    Originally posted by bostonerimus
    But that's part of the attraction - a demonstration of the power of compounding!
    • aroominyork
    • By aroominyork 17th May 18, 8:11 PM
    • 517 Posts
    • 169 Thanks
    aroominyork
    • #6
    • 17th May 18, 8:11 PM
    • #6
    • 17th May 18, 8:11 PM
    I then googled for news on BGS and found this https://monroereporter.com/baillie-gifford-shin-nippon-plc-bgs-l-rci-trending-towards-a-reversal/63680/. I wouldn't know how to start interpreted this except that it suggests that if BGS rises much more it will trigger investors (or machines?) to sell. Are these theories credible? Being an IT I expect that any sales it would not affect the NAV and could only reduce the premium - is that right? - and if so is there any experience of how much these auto-sells affect premiums?
    Originally posted by aroominyork
    OK, got it re the split - thanks. Anything on the other part of my question?
    • Alexland
    • By Alexland 18th May 18, 11:25 AM
    • 2,751 Posts
    • 2,095 Thanks
    Alexland
    • #7
    • 18th May 18, 11:25 AM
    • #7
    • 18th May 18, 11:25 AM
    Who knows what other people's automated trading algorithms might cause - but if there was a general market sell of this trust then it would negatively affect the IT share price (causing the premium to reduce or move into discount) but not the underlying NAV which would be based on the market prices of the underlying assets. Unlike an open ended fund an IT would not be forced to sell assets if the market demand significantly declined.
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