Forum Archive Index - May 2000

[bob prikker <bob_prikker@yahoo.com.au>]

Thursday 25 May 6:02 PM

 

Vodafone float delay casts doubt on wider market 

The shelving of a float of the telecommunications
company, Vodafone, has cast further doubt on the
fund-raising ability of Australian new technology
companies.

Vodafone says volatility in world markets has forced
the postponement.

Vodafone is the second telco in two days to delay its
float with ComVergent taking the same decision due to
the volatility, especially in telecommunications and
media stocks. 

In another sign of the market's new cautiousness,
Peter Morgan of Perpetual Funds Management, says the
big investors are opting strongly for firms with
existing cash flows and a good track record. 

"A lot of these newer companies, high flying
companies, haven't yet shown the ability to generate
profit so they've got no retained earnings and they
can't really go to a bank," he said.

"When uncertainty comes into the marketplace they're
going to find it difficult in what is now going to
become a competitive environment to raise capital to
keep them going."

Today, the money earmarked for Vodafone has instead
flowed into rivals, Telstra and Cable and Wireless
Optus, both substantially higher.

Overall, the All Ordinaries index added nearly 8
points, to just under 2,980, in cautious trade.

Meanwhile, a stronger-than-expected recovery in
business investment during the March quarter gave the
Australian dollar an initial boost.

Capital spending rose by a seasonally-adjusted 9.4 per
cent, while projections for the next financial year
are now 6 per cent higher than at this time last year.

Heavy selling this afternoon has pushed the currency
back again, to around 56.6 US cents, down 0.25 cents
since this morning.  Add Top Stories to My Yahoo!  

 


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