Forum Archive Index - December 1999

["hugh webber" <hugh.webber@clear.net.nz>]

hullo Marion,
just thought I'd jump in with a comment to get the ball rolling.
I looked at my broker circular and I'm afraid Tower isn't mentioned in
either the NZ or Australian companies mentioned.
I looked at the Press sharetable for yesterday and its a bit short of data
as a new listing but it shows (a) Tower at $5.53 is near the top of its
trading range between $5.23 and $5.66 - that's bad, its expensive and
there's a terrific lot of policy holders who got the shares for nothing she
would be subsidising (b) there's notes - b (new listing) t (asseses on
preliminary results only) w (assessed on final dividend only.  (c) its
shown as having a dividend of 12 cents per share and tax imputation of only
1 cps. The tax imputation is particularly poor, one should be looking for a
maximum tax imputation of 5.91 cps on 12 cps.

Suppose one took a generous view and said ok they'll double that over a
full year with the interim dividend - that gives you a gross benefit of 26
cps which is a gross 4.7% yield which is very poor when you consider that
say Hallensteins is offering a gross yield of 10.5% and Telecom a gross
yield of 7.5% and there are a reasonable number with good yields.
Really Boonzaier should have jumped on Ron Brierley's GPG bandwagon instead
of doing a personal ego trip for himself but that's water under the bridge
now. I did hear a suggestion that as a relatively small insurance co on the
Australasian scene it would get gobbled up sooner or later, but my personal
opinion, and I could easily be wrong on that, is don't hold your breath.

Sometimes you get a funny reaction to this sort of factual analysis; the
investor has already fallen in love with the share and they'll buy it no
matter what anyone says, they're just looking for someone to agree with
them. Anyway, good luck to her whatever she decides.

cheers,
Hugh

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