Forum Archive Index - October 2001

["G Stolwyk" <stolwyk@wave.co.nz>]

I was interested to know how the ranking in the 40 index was performed .

 

The NZSE said that "ordinary and preference shares of Fletcher Challenge Forests Ltd are added together to give a single market capitalisation figure for ranking purposes".

 

And as Malcolm pointed out in the previous post, the FFSPA share ranks ahead to 25 cents/share in the event of a liquidation.

 

On the fifth anniversary of their issue, FFSPA shares  will convert to FFS shares. Many observers doubt if FFS/FFSPA will still exist by then!

 

Anyway, my opinion has always been that some of the larger overseas buyers are not familiar with the term " preference shares " and may insist on FFS shares!

 

There are also twice as many FFSPA listed and there will be less scarcity therefore.

 

Malcolm pointed out, a FFSPA  share @ 25 cents would be a better buy than a FFS share @ 26 cents!

 

And if there is a takeover of the Forest shares, I doubt there will be a different value for FFSPA : The RBC Directors, who have the whiphand, will make sure that this does not happen; RBC has a large FFSPA component.

 

In any case, both classes trade often at the same price.

 

Gerry