Updated the Preference Shares page with the latest retail offering from DBS:
http://sgretailinvestor.blogspot.com/2009/12/banks-preference-shares.html
Given that this is DBS, which enjoys the support of Temasek, company specific risks are not significant (if DBS goes belly up, Singapore will be a goner too).
The 3 key risks are:
- inflation risk (if inflation is higher than 4.7%, dividends from preference shares would be losing value)
- interest rate risk (again if fix deposits are higher than 4.7%, who wants the preference shares which comes with higher risk)
- liquidity risk. The trading volume for preference shares are pretty low.
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