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[sharechat] Bonds vs. Stocks


From: "Graeme & Paula Richardson" <chemist@actrix.gen.nz>
Date: Sun, 11 May 2003 21:01:56 +1200


Why are kiwis so keen to provide debt finance for companies through debenture bonds that offer average rates of return for the risk involved, and which also offer the company concerned tax favorable sources of finance, when they will not back companies and buy equity stocks? Shares for several companies have quietly increased over the past year e.g. FBU, HBY, SKC, CEN, HLG, and many are today offering excellent yields. It seems that a fear of short term stock 'losses' are forcing kiwis into trading potentially risky debentures with companies that seemingly cannot attract shareholder funds. Perhaps we are not realising that NZ shares today are by world standards very cheap.
 
 
Graeme Richardson

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