Investors initially pay only a portion of the current Share price of a particular company, but still receive the full dividends paid out by the company. The price of a Share Instalment moves in tandem with the underlying Share, so investors also gain the same capital growth they would have if they had bought the underlying Shares directly. The investor has the option of paying a second instalment on or before the expiry date of the Share Instalment to take full ownership of the underlying Shares.
Who is this for?
- Traders with a slightly longer-term view.
- Investors who understand the risks and how to implement risk controls such as stop losses.
- Investors looking to gear their exposure to Equity Markets by making only a part payment for Shares up front.
- Conservative investors who like the margins of gearing available as a result of trading these products.
Features
- Cost-effective way of borrowing to invest in Shares.
- Share Instalments enable you to gain a higher dividend yield because you still receive full dividends, even though they did not have to pay the full Share price.
- Investors are not obliged to take up the underlying Share at expiry or make the final payment. This means that losses are limited to the initial payment, even if the underlying Share price goes down.
- Share Instalments are traded on the JSE and are therefore very liquid. This means that investors can easily sell them before maturity if they wish to do so.
- Investors may face some degree of risk because economic and social situations are unpredictable may positively or negatively impact underlying Share prices and therefore the price of Share Instalments.
How to get Share Instalments
You can buy and sell Share Instalments on the JSE just like any listed Equity Market instrument. Open an account with an authorised JSE Equity member to buy or sell them.