UPDATE: My article on DRP and Maybank’s DRP updates can now be found hERE.
This article can be considered outdated.

What is a DRP (Dividend Reinvestment Plan)?

Completed my second Maybank DRP (Dividend Reinvestment Plan) today. One qualifies for a DRP if you’re a shareholder before the Ex-Dividend date. If you’re unsure of what a DRP is, I’ve written about it previously.

To recap, the things you need to do when applying for a DRP are:

Decide how many shares you’d like to receive in lieu of cash dividends;
Sign and date the Dividend Reinvestment Form (“DRF”);
Fill in your CDS account number in the DRF;
Affix a revenue stamp / setem hasil to the DRF; and
Mail the form

Maybank DRP

So back in October, Maybank offered their shares at RM7.25 per share and I applied for the maximum allotted to me – 68 measly units. Back then, RM7.25 was a 5% discount to the current market price. I would’ve made a profit of RM27.88.

After including the cost of the revenue stamp of RM10 and the stamp to deliver the form of RM0.80, that left me with RM17.08 in savings. I vowed to first sort out the calculations before wasting an hour of my life waiting in line at the post office for RM17.

Maybank DRP Setem Hasil — *Malaysia’s Revenue Stamp / Setem Hasil*

This time around, Maybank offered their shares at RM8.25 per share. That’s roughly a 13% discount, considerably higher than the 5% offered the last time. Also, instead of 68 shares previously, I was allotted 84 shares this time around. Which translates to RM90.72 in savings for me (based on the market price of RM9.33 today). So this time, I decided to be a little more detailed / anal about my calculations.:

RM90.72 (savings) – RM10 (setem hasil) – RM0.80 (stamp) + RM 10 (estimated brokerage fees)
Final savings: RM89.92

PosLaju and Revenue Stamps

RM89.92 was worth my time. Went early to the PosLaju near my work area, arrived at 9.30 am sharp and got my number. I waited for about 5 minutes for my turn, purchased the RM10 Setem Hasil and RM0.80 stamp required for postage. I was done by 9.45 am. Wham, Bam! Thank you, Ma’am.

In my experience, it’s best to head to your local PosLaju as early as possible. Any time after 10 am or during lunch hour and you’d be faced with 1 hour-long queues. If your workplace has an office boy handling your mail, you can also seek his/her help out with this.

Also, you’re only able to get your revenue stamps / setem hasil at PosLaju outlets and from LHDN. I’ve tried enquiring at other more convenient places like Mailboxes etc but unfortunately, they don’t sell revenue stamps.

Maybank Dividend Reinvestment Plan DRP — *Pos Laju*

Maybank 2017 Dividend

Maybank Dividend — *Malayan Banking Berhad*

Now, to the numbers. My gross investment in Maybank is RM25,723.21 with an average price of RM8.1197 per share. Notice the dividend totaling RM1,013.76 in value. That’s the first interim dividend Maybank is paying me which gives me a dividend yield so far of 3.94%. Opting for the 84 units in shares, I’ll be receiving the remaining RM316.80 in cash. Traditionally, Maybank’s final dividend payout in October will be slightly higher than their first dividend.

Think on that for a moment. This is Malaysia’s largest bank and I’ll be receiving (if all goes well) 8% in dividends from them. And I’m not even including my capital gain. So to those of you who’ve been asking and comparing my dividends to FDs. This is what I’m talking about. In the long term as the companies I invest in grow from strength to strength, so does my dividends. It may be 1-2% now but they’d be growing every year, some drastically like Maybank’s 8%. However, your FDs will follow the board rate, always hovering at 3-4%.

This 8% yield is possible because I managed to purchase their shares back when everyone was worried because Maybank lent money to 1MDB. With some common sense, you’d realize that the bank’s loan to 1MDB is minuscule and negligible compared to their entire loan portfolio. So why the fuss?

Even now at RM9.33 per share, the yield would be 5-6%. If I had been more diligent in watching Maybank, I’d have been able to snap them up at even lower prices. Learn how to start investing hERE.

End.

With Maybank DRP this time, I’d be adding 84 additional shares to my portfolio at the cost of RM10.80. Managed to save about 90 bucks with this exercise so I’d say it was a morning well spent. I even got to fill my stomach with some delicious prawn mee nearby at Restoran Fong Lie. It’s one of the best prawn mee in town.

Anyone else opted for Maybank’s DRP? Or did most of you take the dividends in cash instead?

As always thank you for reading!

What is a Dividend Reinvestment Plan (DRIP / DRP)?

A dividend reinvestment plan abbreviated as DRP or sometimes DRIP is a plan offered by a corporation that allows shareholders to reinvest their cash dividends into additional company shares. Usually, shareholders receive cash dividends as a form of reward for owning stock in a corporation. However, with a DRIP, in lieu of those cash dividends, shareholders can instead opt to purchase and acquire additional stock in the company.

In most cases, a dividend reinvestment plan allows investors to purchase shares commission-free and at a significant discount to the current share price.

The things you need to do when applying for a DRP are:

Decide how many shares you’d like to receive in lieu of cash dividends;
Sign and date the Dividend Reinvestment Form (“DRF”);
Fill in your CDS account number in the DRF;
Affix a revenue stamp / setem hasil to the DRF; and
Mail the form

Advantages of a Dividend Reinvestment Plan

1. Commission-free

As mentioned earlier, one of the biggest reasons shareholders opt for a DRIP is because you don’t have to pay your brokerage or commission fees.

2. Discount

More often than not with a DRIP, the shares offered will be at a discount compared to the current share price. Between zero commissions and the discount given, the cost to acquire shares through a DRIP is significantly lower than if the shares were purchased on the open market.

Dividend Reinvestment Plans in Malaysia

In Malaysia, not many companies currently offer DRPs. I still fail to comprehend the reason for this but it may be because most companies are just unwilling to spend the money to have such an exercise annually. There are many advantages to a dividend-paying corporation that offers DRPs. First, shares purchased through DRPs indirectly free up more capital for the corporation to use. Secondly, I believe shareholders who actually acquire shares through a DRP are more resilient and loyal as they can more easily recognize and appreciate dividends in their long-term growth investment.

Another issue I have with the DRPs offered by Malaysian corporations is that we as shareholders don’t have the option to automate the process. We have to do fill-up the form and mail it every single year if we wish to participate. There should be an option for us to automatically reinvest our dividends.

Online Dividend Reinvestment Plans

As we approach 2021, Malaysians are now able to apply for DRPs online. I’ve used both Tricor and Boardroom to apply for my DRPs.

This is a godsend for me as I no longer have to face the long queues at post offices just to send in a physical copy of my DRP form. Instead, I pay an extra RM3 handling fee to issuing houses like Tricor and Boardroom and let them do the necessary legwork.

Rakuten Trade

An even better and cheaper way to apply for Dividend Reinvestment Plans is through a nominee account. If you’re a Rakuten Trade user, you would have noticed that they don’t charge you a single cent for corporate actions. No hassle, no fees, you even save on the RM10 setem hasil.

I am in the process of moving most of my stocks that have DRPs to my Rakuten account as they can handle all corporate actions.

You can sign up for a Rakuten Trade nominee account directly here.
For FREE. You can read more about Rakuten Trade hERE.

Maybank Dividend Reinvestment Plan

Maybank is one of the few companies in Malaysia and in my portfolio that consistently offers dividend reinvestment plans every year.

I’ve been opting to go for their DRP and receiving discounted stocks instead of receiving dividends in cash. Of course, you should do this only when the math makes sense.

It is simple math. You compare the issuing price to the share price today and deduct the cost of applying for the DRP – RM10 setem hasil and a RM3 handling fee for an online application.

DRPs don’t make sense when the share price has of the company has been dropping for the few months preceding the DRP. I’ll be using Maybank as an example and continue to update this article as I opt for dividend reinvestments.

Boardroom’s Online DRP Application

Updated 2022

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2022’s DRP is at RM8.28 per share this time. Seeing that the price of Maybank is hovering around RM9+/- right now, I went for it. Similar to last year’s DRP, Maybank is still using Boardroom. can find Boardroom’s website hERE.

I did mine online again as well, paid RM13, which is broken down into RM10 for the revenue stamp and RM3 for Boardroom’s service fee.

Updated 2021

Another Maybank DRP but this time, it was with Boardroom instead of Tricor. Why the change? I think it was due to Tricor’s handling of Maybank’s virtual AGM this year, they messed up and Maybank has opted for their rivals – Boardroom.

The process was pretty seamless, as easy as with Tricor. So I’ll not post a step-by-step guide this time around.
You can find Boardroom’s website hERE.

You register with your email, together with photos of your MyKad. I had to wait a day for my account to be approved. Thereafter, their system will automatically tie your IC to companies you own in your CDS accounts. DRPs will appear under ”Corporate Actions”. From there, follow the instructions and eventually you’ll have to make the RM13 payment. And.. you’re done!

Things to note are the RM10 setem hasil fee as well as the RM3 service fee charged by Boardroom. Which is exactly the same as what Tricor charged in 2019. The issue price of the shares offered by Maybank is RM7.55 per share this time around.

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I’ll be receiving a total of RM1,040.65 in dividend income.
Based on that and the terms of Maybank’s DRP this round, I can opt to receive a maximum of 75 shares. At an issuing price of RM7.55, that’s about RM567.63 in value.
The remaining RM473.02 will be paid out to me in cash.

Tricor’s Online DRP Application

Updated 2019

Step 1 – Register and Login

First, head over to Tricor and obviously, you’ll have to go through the motions and sign up for an account.

Proceed to login to your account.

Step 2 – Selecting the Corporate Exercise

As highlighted in the image above, select the corporate exercise you as a shareholder wishes to take part in.

In this case, Maybank’s Dividend Reinvestment Plan. Click ‘Next’.

Steps 3 & 4 – Terms and Conditions of the DRP

The next step brought me to the T&Cs of the dividend reinvestment plan. Read through, check the box and click ‘Next’.

Maybank is giving out shares in lieu of cash dividends. The shares will be issued at RM8 per share.

The lower the figure, the better. Because I’ll get more shares.

Step 5 – Declaration

Declare that you’re fit to participate in the corporate exercise. Check the box and click ‘Next’.

Step 6 – My Dividends

So, this is how a DRP works. First, the price for one Maybank share is hovering around the RM8.9 and RM9 region.

Without the DRP, I stand to receive RM1,052.16 in dividend income. Cash.

By electing to receive my dividends in Maybank shares instead of cash, I’ll receive 69 Maybank shares and RM493.20.

How did I get 69 shares you ask? That’s RM558.96 / RM8 per share.
RM8 being the issue price mentioned earlier.

Why DRP?

So, the why is simple. I stand to receive RM1,052.16 if I took it all out in cash.

Maybank is giving me some of it in shares, at RM8 per share.

The market price for one Maybank share is RM8.90. That’s a 11.25% premium. So if the price holds, I’ll gain 11.25% on my 69 shares.

However, you do not want to opt for a DRP if:

1. The issue price is ABOVE the share price (duh)
2. The issue price is really close to the share price.

First, no one in their right mind will opt for Maybank’s DPR if say, the market price for a share is RM7. This usually happens when a stock’s prices are in a freefall.

For number 2, we have to pay to participate in corporate exercises. In this case, see Step 7.

Step 7 – Payment

Followed the instructions and made my payment. RM13 in handling fees and stamp duty.

An extra RM3 in handling fees. Heck, I’d pay RM10 to save my time.

The Traditional Dividend Reinvestment Plan – Post Office and Setem Hasil

Update 2016

In my portfolio, only two companies have DRIPs – Maybank and Axis REIT. I received Maybank’s dividend reinvestment form (DRF) through the mail on the morning of 10 October 2016. Previously, I’ve read online that Maybank is offering shares purchased through their DRIP at RM7.25.

For those of you who are unfamiliar with Dividend Reinvestment Plans in Malaysia, there are a few things you take note of:

The due date to return the DRF;
Every DRF requires a RM10 revenue stamp (setem hasil) which can be purchased at your local post office;
Jotting down the amount of shares you intend to purchase; and
Your signature.

However, reading through the DRF, I noticed that the due date to return the form to them is on the 13th of October. Being a Monday, the post office was packed and I had to wait for close to an hour to purchase my revenue stamp and post the DRF. Below is a picture of the DRF.

Dividend Reinvestment Plan (DRIP) Malaysia — *Maybank’s DRF*

As of today, Maybank’s shares are at RM7.66, which means the shares acquired through the DRIP is at a 5% discount.

Have you participated in any Dividend Reinvestment Plans? Also, do any of you know of companies in Malaysia that offer an automatic DRIP?

As always, thank you for reading.

Setem Hasil