What To Do with Oddlot Shares From Stock Dividend?

Have you guys received your 30% stock dividend from MBT (Metrobank)? I received mine. Whenever I am receiving dividends from publicly listed companies, it’s always a great feeling. And it never grows old.

MBT’s price is around 80 so its board lot is 10 because its price is between 50 and 1000 pesos. Please see below board lot table.

If stock price is 1000 pesos or more	Board lot is 5
If stock price is between 50 and 1000 pesos	Board lot is 10
If stock price is between 5 and 50 pesos	Board lot is 100
If stock price is between 50 centavos and 5 pesos	Board lot is 1000
If stock price is between 5 centavos and 50 centavos	Board lot is 10,000
If stock price is between 1 centavos and 5 centavos	Board lot is 1,000,000

Let’s say I received 312 MBT shares as dividends. I can sell the 310 MBT shares at the main board while the remaining 2 shares can only be sold at the oddlot board.
When I checked the number of shares I received from MBT, I noticed that the number of shares credited is not rounded off to ten. May butal siya. 

Dreaded Oddlot Shares

So what will I do with these 2 oddlot shares? The bid and asking price for oddlot shares generally deviate from the current price of the stock considerably. To illustrate what I am trying to convey, see below BPI’s real time quote.

COLFinancial screengrab

The bid and asking price were heaven apart from each other! Yesterday, BPI price is 96.50. If you want to buy 8 oddlot shares, you need to pay 144.50 per shares, a 50 increase from yesterday’s price! On the other hand, if you want to sell your 2 oddlot shares, a buyer is willing to acquire your 2 oddlot shares at 90.15, a 7% decrease from yesterday’s price. The price fluctuations at oddlot board are quite huge.

Now, let’s take a look at the main board lot. The bid and ask spreads are reasonable. They are sensible. The bid and asking price do not deviate much from yesterday’s price.

COLFinancial screengrab

Strike While the Iron is Hot

MBT’s 30% stock dividends were distributed yesterday. The recipients include owners, institutional investors, and of course us, the retail investors. I am 100% sure that I am not the only one who receives an oddlot shares from this 30% stock dividend. Since the oddlot shares are still hot and fresh, retail investors having oddlot shares dilemma flock the market to either buy or sell their oddlot shares.  Take a look at the oddlot board of MBT today.

COLFinancial screengrab

The bid and ask spreads did not deviate much from yesterday’s price because there are retail investors who either want to buy or sell their oddlot shares. Hundreds if not thousands retail investors received oddlot shares in this 30% stock dividend of MBT. The evidence is not lying. Did you notice the number of MBT trades for oddlot today? The total is 97. That was a sizable number for oddlot shares trading. If you compare it with BPI’s oddlot shares above, BPI’s number of oddlot trades is only 3.

NOW is the time to buy oddlot shares while the price is still reasonable. In my case, I need to buy 8 oddlot shares so that all my shares can be traded at main board in the future.

Alternatively, if I want to sell my two oddlot shares, I’ll do it now while the price is still sensible. It won’t be too long before MBT’s trading of oddlot shares will exhibit absurd bid and ask spreads similar to BPI above.

What to do?

If you have oddlot shares, I suggest that you either buy or sell them NOW while the prices are still sensible and buyers and sellers abound. Since I am long term investor, I just bought 8 shares of MBT so that in the future, I can sell them at the main board and within the market’s reasonable fluctuations.

Related Reading: What Stocks Can You Buy for 5000 Pesos

What Stocks Can You Buy for 5,000 Pesos at Philippine Stock Market?

There are two ways to buy stocks in the stock market. One is by buying through Oddlot and the other one is through Boardlot.

Boardlot – If you want to buy PLDT whose board lot is 5, the shares must be divisible by 5. Meaning, you can only buy PLDT shares at 5 shares or 10 shares or 15 shares or 20 shares or 25 shares and so on and so forth. You cannot buy PLDT at 4 shares or 6 shares or 9 shares or 12 shares because they are not divisible by 5.

Boardlot is also the minimum price you can buy for the stock. For example, the price of PLDT is 2,2994 pesos per stock as of today, since the boardlot is 5, the minimum price for PLDT is 11,470 pesos. In this case, if your money is 5,000 pesos only, you cannot but PLDT today.

Based on the 30 companies included in the Philippine Stock Index below, you cannot buy Globe, SM Investments and PLDT shares (yellow highlight) if your money is 5,000 pesos only. The good news is you can buy the rest of the companies with your 5,000 pesos.

SECURITY NAME	SYM	BOARD LOT	PRICES	Amount (Php)
AYALA CORPORATION	AC	10	300.8	3,008.00
ABOITIZ EQUITY VENTURES, INC.	AEV	100	39.30	3,930.00
ALLIANCE GLOBAL GROUP, INC.	AGI	100	10.14	1,014.00
AYALA LAND, INC.	ALI	100	15.30	1,530.00
ABOITIZ POWER CORPORATION	AP	100	30.00	3,000.00
BANCO DE ORO UNIBANK, INC.	BDO	10	56.00	560.00
BELLE CORPORATION	BEL	1000	4.02	4,020.00
BANK OF THE PHILIPPINE ISLANDS	BPI	10	56.70	567.00
CEBU AIR, INC.	CEB	10	79.90	799.00
DMCI HOLDINGS, INC.	DMC	100	36.50	3,650.00
ENERGY DEVELOPMENT CORPORATION	EDC	100	6.06	606.00
FIRST GEN CORPORATION	FGEN	100	14.20	1,420.00
GLOBE TELECOM, INC.	GLO	10	926.00	9,260.00
INTERNATIONAL CONTAINER TERMINAL SERVICES, INC.	ICT	10	50.65	506.50
JOLLIBEE FOODS CORPORATION	JFC	10	88.80	888.00
JG SUMMIT HOLDINGS, INC.	JGS	100	23.80	2,380.00
METROPOLITAN BANK & TRUST CO.	MBT	10	69.30	693.00
MEGAWORLD CORPORATION	MEG	1000	1.85	1,850.00
MANILA ELECTRIC COMPANY	MER	10	256.00	2,560.00
METRO PACIFIC INVESTMENTS CORPORATION	MPI	1000	3.16	3,160.00
MANILA WATER COMPANY, INC.	MWC	100	19.76	1,976.00
PHILE  MINING CORPORATION	PX	100	23.75	2,375.00
ROBINSONS LAND CORPORATION	RLC	100	12.16	1,216.00
SEMIRARA MINING CORPORATION	SCC	10	207.40	2,074.00
SM INVESTMENTS CORPORATION	SM	10	531.00	5,310.00
SAN MIGUEL CORPORATION	SMC	10	122.00	1,220.00
SM DEVELOPMENT CORPORATION	SMDC	100	8.44	844.00
SM PRIME HOLDINGS, INC.	SMPH	100	12.20	1,220.00
PHILIPPINE LONG DISTANCE TELEPHONE COMPANY "Common"	TEL	5	2,294.00	11,470.00
UNIVERSAL ROBINA CORPORATION	URC	100	43.00	4,300.00

 Generally, investors and traders are buying stocks in boardlot tranches because they are easier to sell and trade.

Oddlot – if you want to buy 4 PLDT shares, you cannot do that because the price of PLDT which is 2,294 pessos is more than 1,000 pesos and it falls under the minimum board lot of 5 shares as you can see below. Boardlots are being determined by the current price of the stock. See below.  

Very few investors buy through oddlots. Stocks sold at boardlots are easier to sell than oddlot stocks.

My recommendation with your 5,000 pesos is you buy companies whose minimum board lot is less than 5,000 pesos. Based on the stocks listed above, you can choose 27 companies whose board lot amount is less than 5,000 pesos. Avoid oddlots purchases as much as possible because  they are a little bit hard to sell.

If stock price is 1000 pesos or more	Board lot is 5
If stock price is between 50 and 1000 pesos	Board lot is 10
If stock price is between 5 and 50 pesos	Board lot is 100
If stock price is between 50 centavos and 5 pesos	Board lot is 1000
If stock price is between 5 centavos and 50 centavos	Board lot is 10,000
If stock price is between 1 centavos and 5 centavos	Board lot is 1,000,000