Waltus critic goes from adversity to advantage

Friday 26th January 2001

Shayne Hodge

By Chris Hutching

Some of the first shares offered for sale in the new amalgamated Waltus Property Investments have sold for nearly half the $1 listing price, providing a windfall for canny punters - including one of the strongest opponents of the scheme.

The amalgamation of 27 separate Waltus property syndicates into one larger trust was fought in the High Court by a small group of investors late last year, led by financial adviser Murray Weatherston.

They were fearful they would be disadvantaged because the new shares would be discounted by the market.

Although Mr Weatherston's predictions of a muted share price and illiquidity appear to have been proven correct in the short term, he has turned adversity to advantage.

Last week he bought a parcel of the shares at 54c, representing a yield of 16%, and further parcels at 62c and 72c.

Mr Weatherston said he understood that about 200,000 shares had traded so far. There are 25 million on issue. There was also an issue of convertible notes as part of the scheme but they will begin trading when Waltus arranges a trading exchange at its Lower Hutt offices.

"According to the recent trades the investment has fallen roughly 35%. Clients I've spoken with have lost faith in the company. I wonder what advisers who urged their clients to accept the scheme are telling them now? And the issue of fees is still to be determined by the court," Mr Weatherston said.

Waltus Management managing director Shayne Hodge said it was far too early to make claims about a slump in price and illiquidity.

"Most people didn't even know we were successful in the High Court against Weatherston's challenge because it was just before Christmas and we've only just come back this week.

"The traded volumes have been tiny. When I heard there were some going under 60c I thought I'd be in too - you could form the queue behind me. But I found out it was only 2065 shares going. You'll always get a few keen sellers at the beginning and there are people winding up estates and stuff too. Have a look in four weeks or so and the situation will be different," Mr Hodge said.

He expected the shares to trade at around a 10-15% discount to asset backing because that was the norm for property trusts.

Meanwhile, one of the chief proponents of the amalgamation, Kelvin Symes of Northplan Financial Services, said he had been telling his clients to buy as many units as they could at current prices. But when he made inquiries to a broker about buying more units he was told there were none available because they had been bought by the Waltus Property Trust.

Mr Symes is bullish about Kiwi stocks at the moment and reckons they are at bargain basement prices with yields of of 10-20% in some cases.

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