N-shares versus ordinary shares

Van der Vyver, Anton Hendrik (2002-12)

Thesis (MBA)--Stellenbosch University, 2002.

Thesis

ENGLISH ABSTRACT: The mini study project attempted to answer questions relating to the relationship between N-ordinary shares (N-shares) and ordinary shares of the same company. Questions relating to the movement in share prices of the two types of shares were formulated. Various statistical data was used to compare the two types of shares. The study identified sixteen (16) N-share listed companies as at 12 July 2002. The results indicate that the N-shares, compared to the ordinary shares, trade at a considerable discount. Certain N- shares, on the other hand, trade at almost no discount. It was concluded that when control in a specific company is not an issue and the N-shares trade at a discount of more than three percent (3%) to the ordinary shares, the N-shares should be bought. The choice is between the two types of shares and not whether one should invest in the specific company or not. The discount should however be more than the cost of transferring from one share to another. The cost of the transfer was taken as three percent (3%) of cost.

AFRIKAANSE OPSOMMING: Die mini werkstuk probeer om die vrae rondom N-gewone aandele (N-aandele) en gewone aandele van dieselfde maatskappy te beantwoord. Vrae oor die beweging van aandeelpryse van die twee tipe aandele is saamgestel. Verskeie statistiese data is gebruik om die twee tipe aandele te vergelyk. Die werkstuk het sestien (16) N-aandeel genoteerde maatskappye soos op 12 Julie 2002 geïdentifiseer. Die resultate wys dat N-aandele in vergelyking met gewone aandele teen 'n aansienlike diskonto verhandel. Sekere N-aandele, aan die anderkant, verhandel teen feitlik geen diskonto nie. Daar is tot die slotsom gekom dat indien beheer van 'n spesifieke maatskappy nie 'n voorvereiste is nie en dat die N-aandele teen 'n diskonto van meer as drie persent (3%) verhandel, die N-aandele gekoop moet word. Die keuse is tussen twee tipe aandele en nie of daar in die spesifieke maatskappy belê moet word of nie. Die diskonto moet egter meer wees as die koste van die omskakeling van die een aandeel na die ander. Die omskakelingskoste is geraam teen drie persent (3%) van koste.

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