Forum Archive Index - March 2000

[frank fernandez <frank.fernandez@xtra.co.nz>]

Hi all,
For many years, INL has sat with the likes of Telecom, Warehouse and
Baycorp on the NZSE - attainable only by those who can afford its
premium share price. However, a two-for-one share split comes into
effect tomorrow, a move expected by many analysts to see great demand
for a stock which finished up at $9.85 last Friday but will open up at
$3.28 tomorrow. (In last week's trading, INL posted the best weekly gain
with a lift of 6.9%)

I personally believe there will be a huge demand for INL shares this
week - from investors who do not yet have this blue chip stock in their
portfolio. However I also doubt whether there will be many sellers for
various reasons. INL's announcement of a special dividend of 8.5cents
for each split share with the record date being 24 March may well ensure
few defectors over the next week. However, major and more pertinent
reasons for retention or purchase of INL shares would be the company's
prospects of strong future financial growth in a media sector where it
has a dominating role. With its 49.6% stakeholding in SKY television,
INL also looks set to benefit from SKY's increasing digital subscriber
base - all valid reasons on their own to support including such a valued
stock in one's portfolio.

However, investors are often fired up by the more exciting developments
in a company's bid to widen its business scope.  And INL is no
different. It has been apparent for a while now to many analysts that
the more exciting future opportunities for INL would be in its abilities
to enter into the world of internet entertainment and e-commerce through
its various stakeholdings and associations. 

In its recently released half-year results, Mike Robson of the company
had this to say:
"Our investment in Sky gives us an unparalleled entry into the new
electronic future. There are exciting developments over the next 12
months which will considerably enhance Sky's business. A key activity in
the period has been the development of INL's Internet site due for
launch in the current half-year. Creating a major Internet presence is a
natural step for New Zealand's largest publishing group and that on-line
news and information would become a cornerstone of INL. Much has been
written and said about the power of the Internet. Our site will harness
the inherent strengths of this medium to provide New Zealanders with
more choice and variety in the way they receive and digest information."

Interesting words from Mr Robson but not much given away.  It is however
understood that INL's work in transforming its website from a static
information site to a "news and information portal" has been a massive
project involving several different teams of internet developers. One
such team working on the project has been
CyberElves website developers who have helped developed sites such as
Flying Pig and MP3.net.nz, and who are also currently providing
developing consulting and project management advice to Telecom NZ as
they move their website to a vignette story server.

The recent appointment of Craig Heatley to the INL Board is also an
interesting one as he is a major shareholder in newly-established
eVentures, part-owned too by Rupert Murdoch and Japanese internet
investor, Softbank Corporation. [For those interested, eVentures intends
to bring a wide range of internet-based businesses to New Zealand,
ranging from shopping malls to home mortgages and will also invest in
new and established internet businesses and concepts here. New Zealand's
fourth-largest internet service provider, Iconz, is also owned by
Softbank through another of its investments, Asia Online]

Judging by the lack of news and extreme secrecy behind INL's internet
plans, all predictions are that it will be nothing short of spectacular
- which, when it all comes together, will undoubtedly boost the share
price.

Sharechat readers may also be interested to know about Baycorp's
experience in the past year when it split its share price. Baycorp's
shares were trading at $10.25 before the company announced its 2:1 share
split last May. Chairperson Rosanne Meo then said that the lower share
price would encourage higher participation by investors. She was proven
right and with BCH's shares trading at $9.90 last week, it may not be
long before it has to make another share split.

Because of the Baycorp's case, analysts have expressed doubt whether
Rupert Murdoch and Mike Robson can keep the INL price affordable in the
long term for the average investor. The Sunday Star Times today said
this would need to be a fine art "given that INL is performing almost
too well for its own good". 

As an INL investor, I can assure Mr Murdoch and Mr Robson that I will
not be complaining. Happy investing this week.

Frank Fernandez

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