Question 1: Can I still buy the major banks to get the next dividend payments?
Answer: ANZ goes ex its 35 cent dividend on Monday, so you’d need to buy the shares before close of business on Friday 6 November. Westpac (WBC) goes ex its 31 cents dividend on Wednesday 11 November, so the last date to buy the shares is Tuesday 10 November. NAB is a day later, so the last date to get access to its 30 cents dividend is Wednesday 11 November.
Question 2: I have received a comprehensive report from WAM Capital, together with a Bidder’s Statement, offering to acquire all my ordinary shares in the Contango Income Generator (CIE). The offer is 1 WAM share for every 3 of my CIE shares. I would appreciate your comments.
Answer: I agree with the recommendation from the CIE Board, which is:
“1. Shareholders who want to remain invested in the new WCM Quality Global Growth Long Short strategy should reject the WAM Offer. These shareholders will also gain access to the intended renounceable rights issue.
- Shareholders who do not want to remain invested in the new WCM Quality Global Growth Long Short strategy should accept the WAM Offer”.
One downside to accepting the WAM Offer (you have until 13 November) is that you won’t be issued the WAM shares until about 30 days after the offer closes, potentially as late as 13 December. Because the WAM share price is so over-valued (WAM is trading around $2.30, WAM’s latest NTA at 30 September was $1.68), this crazy premium may not exist when you come to sell your WAM shares. Under no circumstance would I hold on to the WAM shares.
Question 3: There are heaps of companies that are ‘price-takers’ e.g. all commodity stocks, etc. What are some ‘price-maker’ stocks?
Answer: To be a ‘price-maker’, you need to be either an unregulated monopoly or have such a unique or differentiated product/service offering that consumers will pay “your price”. Some of the luxury brand providers come into the latter category.
Companies such as Apple and Microsoft probably qualify.
In the Australian context, look for companies that have no competitors. For part of their product range, CSL and Resmed probably qualify. Sydney Airport (at least for the short term) arguably qualifies, although its prices are regulated by the ACCC.
Question 4: I purchased an ‘AMP Growth Bond – Child Advancement’ investment bond for my niece. I have received a notice from AMP saying that Resolution Life will now own and manage this product. Is this product still a good option, or should I withdraw and invest into another product that has a Child Advancement option?
Answer: Yes, still a very solid product. Resolution Life will manage this product admirably. I would not recommend withdrawing because if the investment bond has been held for less than 10 years, there could be capital gains tax issues.
Important: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. Consider the appropriateness of the information in regard to your circumstances.
