First Time Investors
This page contains answers to general questions regarding investing in stocks and shares. Please ensure you have read our Terms of Use regarding information provided on this website.
What is a share?
What are the financial benefits of owning shares?
What is a dividend?
What is capital growth?
Which factors affect the share price of a company?
What are the tax consequences of keepings, selling or buying Old Mutual plc shares?
How can Old Mutual plc shares be bought and sold?
What is the Old Mutual Share Sale Service?
What are stockbrokers?
What are approved investment managers?
What are the costs of buying and selling shares?
Where can information about the price of Old Mutual plc shares be found?
The ownership of a company can be shared by many people and organisations. A share is a unit of ownership. When you own a share you become a part-owner (shareholder) of a company and you will have the right to:
- receive any dividends paid on each share that you own;
- receive a copy or summary of the company's annual report and financial statements as well as any other shareholder communications; and
- attend, speak and vote at general meetings of the company.
What are the financial benefits of owning shares?
Through owning shares, you may receive benefits such as dividends and capital growth.
A dividend is a sum of money a company may pay its shareholders as income on the shares they own. The dividend amount depends on the company's profits and its need for funds, and usually varies from year to year. There is no guarantee that a company will make dividend payments in any given year or years.
Old Mutual plc currently expects to pay a dividend twice a year.
Capital growth occurs when a rise in the share price gives you the opportunity to sell your shares at a profit. Capital growth is not certain as it depends on what happens to the share price, which can be affected by a number of factors. It is also possible to have a capital loss if the share price falls.
Which factors affect the share price of a company?
The share price will be influenced by a number of factors, some of which are outside the company's control.
The factors may include:
- the performance and prospects of the company;
- the performance and prospects for the industry in which the company operates. In Old Mutual's case this is broadly the insurance, banking and financial services industry;
- political, general economic, financial and stockmarket conditions, particularly where the company operates or is listed; and
- perceptions of investors about the above factors.
As with all listed shares, the share price of Old Mutual plc on any of the stock exchanges where it is listed, can go up or down from time to time.
What are the tax consequences of keeping, selling or buying Old Mutual plc shares?
The tax consequences of keeping or selling your shares or buying more shares depend on your own circumstances and the territory in which you are resident.
- For individuals
Under current South African tax legislation, South African residents will not pay tax on dividend income.
If you are in any doubt about your tax position, Old Mutual recommends that you seek independent professional advice.
- For Funds/Organisations only
Under current South African and Namibian tax legislation, organisations/funds allocated shares on the South African register or Namibian register will not pay tax on dividend income and will generally not pay tax on growth. It is expected that organisations/funds regarded as resident in South Africa or Namibia, will not pay tax on the shares they received upon Demutualisation.
Shares, or proceeds on the sale of a fund's/organisation's shares, transferred from employers to employees or from funds to members, may have tax implications.
If you are in any doubt about your tax position, Old Mutual recommends that you seek independent professional advice.
How can Old Mutual plc shares be sold and bought?
If you wish to sell your shares, you can do so through the Old Mutual Share Sale Service, a stockbroker authorised by the stock exchange or an investment manager approved by the Financial Services Board. If you wish to buy more shares, you can do so through a stockbroker or an approved investment manager.
By law in South Africa, people who buy and sell listed shares as a business must do so through the stock exchange.
For your own security, if you buy or sell shares you should do this through the Old Mutual Share Sale Service, an authorised stockbroker or an approved investment manager. Remember that you are entitled to ask for written evidence of their status.
What is the Old Mutual Share Sale Service?
The Old Mutual Share Sale Service offers shareholders who decided to keep their shares in the Old Mutual Share Account an easy-to-use:
- postal share sale service; and
- telephone share sale service.
View more information about the Old Mutual Share Account and the Old Mutual Share Sale Service.
Stockbrokers are individuals or companies who are members of a stock exchange such as the Johannesburg Stock Exchange. They may provide their clients with advice about shares, and buy and sell shares on behalf of their clients. They generally charge a brokerage fee (also called a commission).
What are approved investment managers?
Approved investment managers in South Africa are companies that offer management services and carry out buy and sell orders through stockbrokers. Both the investment managers and the individuals representing them must be approved by the Financial Services Board.
What are the costs of buying and selling shares?
You will generally need to pay:
- brokerage fees on shares bought and sold; and
- marketable securities tax (a transfer duty) on shares bought. If you sell shares, the buyer will pay any marketable securities tax charged.
Where can information about the price of Old Mutual plc shares be found?
The price of Old Mutual plc shares can generally be found in the financial pages of the daily press and through other media in the countries where the shares are listed.
On the pages showing the share prices, you should look for the heading "LIFE ASSURANCE". Under this heading the various life assurance companies will be listed alphabetically. Look for "OLDMUTUAL".
A number of prices are shown as illustrated in the newspaper extract on the next page. The prices quoted are in cents (for example, 1000 = R10,00) in the South African press, or in pence (for example, 200 = £2.00) in the UK press. The prices are for the previous business day's trading on the stock exchange.
An explanation of what some of these prices mean is also provided for your interest. Most people simply look at the Ruling price to give them an idea of the share price.
Remember, prices in the newspaper should only be used as a guide, because they are prices from the previous business day. If you sell your shares or buy more shares you will not necessarily receive or pay the price listed in the newspaper.
An example of the way share prices are shown in a South African newspaper:
As in any market, you will find that stockbrokers are willing to buy shares at one price and sell shares at another price. This can be seen under the Buy and Sell columns in the illustration. For example, stockbrokers were prepared to buy COMPANY A's shares for 470 cents (R4,70) and sell for 500 cents (R5,00).
The Last price is the price at which the last sale was made during that day (R4,90), and the Ruling price (R4,90) is the same unless there were any offers to buy at a higher price or to sell at a lower price after the last sale.
The High price is the highest price at which the shares traded (R5,20) and the Low price is the lowest price at which the shares traded (R4,70).
All the above prices are for the previous business day.