Forum Archive Index - December 2001

["JL & RA Clark Trust Partnership" <JL_Clarke@xtra.co.nz>]

As a longtime, but silent, follower of sharechat discussions I would appreciate more comment, positive or negative, on individual shares or on market segments. I find it hard to believe that any sensible investor would buy any particular share solely on the basis of a gushing endorsement by a "poster" so in my view accusations of ramping are inappropriate. Having said that I would like, rather feebly,to ramp property shares. Looking at the NZSE charts the thing that strikes me is that the index has not gone up since 1988, but as Phaedrus points out, dividends have made a big difference to investors. In general the highest and most consistent dividends are paid by property shares (OK I have heard of TTP). However recorded profits have been hit by write-downs in property values and, in some cases, by unleased space. Property shares usually have borrowings of over 40% of their total assets. But the property market has recovered in Wellington and to a lesser extent in Auckland too so new leasings will help income. Property value write-downs should now diminish or even reverse and the cost of borrowings has gone down. All this should lead to a modest rally in property shares and even a small increase in share value, in association with high dividends,in my view, make property shares a good "buy and hold" over the next year or two. My guess is that some investors who have bonds or bank deposits maturing soon, will turn to property shares to protect their income. Perhaps I should add that I am retired and appreciate the, usually, reliable income from such investments. Of course property shares are unlikely to increase in value dramatically so maybe they are too unexciting to interest many sharechatters. Jonboy.