By Grace Ng

RETAIL investors will get a second shot at OCBC Bank's popular preference shares when a $50 million ATM tranche opens today.

It is part of OCBC's $1 billion offer of bond-like instruments that pay a dividend of 5.1 per cent, much higher than the paltry 0.25 per cent interest for savings accounts.

Retail investors can apply for the preference shares through all ATMs of the three local banks - OCBC, United Overseas Bank and DBS, which includes POSB - from 9am today until noon on July 28.

Investors must subscribe for at least 200 shares priced at $100 apiece, using either cash or money from their Central Providend Fund accounts.

After the initial $20,000 minimum amount, they can apply for more shares in multiples of $10,000.

This placement follows one of $950 million of shares in early June. It received an overwhelming response, with more than 5,000 applications from retail investors - three times oversubscribed - and closed on June 3.

But unlike that placement, which was on a first-come-first-served basis, this ATM tranche will be allocated by balloting if the total subscriptions receive exceed 500,000 preference shares.

Retail investor Annie Tay, a marketing executive in her 30s, plans to apply at the nearest ATM to her office during lunch hour today.

'I didn't pay much attention to the news about the preference shares until I heard that the placement tranche was so popular. I decided that it was a good defensive investment as the stock markets are so volatile now,' she said.

Another retail investor, Mr Y.A. Chu, 44, is not interested in the ATM tranche as he had already applied for the placement tranche and is still waiting for the result.

'I want to keep some cash so I can pick up some blue chips if the stock market falls further. If I don't get the preference shares in the placement tranche, so be it; it may be a blessing in disguise as I will have more funds to go bottom-fishing with.'

This article was first published in The Straits Times on 16 July 2008.