Take The Money And Run While It's Being Offered
The Sunday Age
Sunday November 16, 2003
Brokers will breathe a big sigh of relief tomorrow. The deadline for ANZ shareholders who want to sell their rights entitlements is 4pm. Never in the history of broking (well maybe only once or twice) have brokers had to do so much paperwork for so many tiny orders.
Speaking of rights issues, a lot of people are wondering what to do with the unnecessarily complex paperwork AMP has sent them. This is the $1.1 billion capital raising needed to redeem the AMP reset preference shares (AMKPA). Shareholders have had enough of handing AMP cash that management has done nothing with but spit it up the wall. Stuffing a complex deal through the letterbox is just not a friendly way of asking for more. Most of us will take the paperwork and file it under ``letters from people who have had their chances and blown it". Hopefully the National Australia Bank management will one day do better for us (and won't Andrew Mohl make a fortune out of his redundancy).
For Telstra shareholders, this is your last week to find that share buyback paperwork. You have until 7pm on Friday to tender your shares. For the shares that get sold into the buyback, you will get $1.50 capital (meaning you book a healthy offsettable capital loss) and the rest will come as a fully franked dividend. Telstra has the capacity to do another one of these buybacks next year.
As you sit back in anticipation of a cheque from Telstra, you should perhaps, in hindsight, be grateful the company spat billions of dollars up the wall in Asia doing deals with 30-year-olds in the middle of the tech boom. At least now the Telstra management has realised that you, as a lowly shareholder, are better at spending the cash than they are.
On the subject of management, the great thing about Telstra is that despite the tech boom cock-ups, it didn't change. It was Ziggy Switkowski who got a bloody nose in the tech boom and it was Ziggy Switkowski who pulled his neck in and instigated the ``give the shareholders the cash" policy. And Telstra just extended his contract until December 2007. Four more years of cash returns. Yippee.
The ramble of annual general meetings continues this week. AGMs have, on balance, brought tidings of no comfort and joy. Warnings about the impact of the rising $A have been the main cause for concern. Stocks with currency exposures that are having their AGMs this week include OneSteel and Brambles. Woolies has its AGM on Friday.
Marcus Padley is the author of the daily stockmarket newsletter Marcus Today (www.marcustoday.com.au). The views expressed are hisown and readers should take further advice before making financial decisions.
© 2003 The Sunday Age