For new investors who would like to start and learn how to invest in the Singapore stock market, the local banks (DBS, OCBC and UOB) preference shares offers a good entry point by being very low risk, long term investments (>1yr)
Basically Preference shares have been around almost 10 yrs and forms part of the Tier 1 capital of banks. Hence they are fundamentally safer than ordinary shares of the local banks. In the very unlikely event (never happened in Singapore history!) that the local banks are wound down, pref shareholders have a higher priority of payout compared to ordinary bank shareholders. This is really a doomsday scenario in Singapore, if any of the local banks fail, any company in Singapore is not safe, not even your bank deposits or cash or anything!
There are currently a number of pref shares out in the stock market like DBS4.7%, UOB5.05%, OCBC5.1, OCC5.1%, OCC3.93% etc
These pref shares payout semi-annual dividends to shareholders. A relatively good ~5% return as compared to the current bank deposits interest of 0.1%
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