Question 1: Star Entertainment Group (SGR) is raising capital again at 60 cents per share. Should I take up my entitlements?
Answer: I really am in two minds about this. On the one hand, I advised clients to participate in the last capital raising in February when the issue price was $1.20 per share. I argued that Star (like Crown) was “too big to fail” and that $1.20 was “bargain basement” territory. How wrong I have been with respect to the latter.
On the other hand, the institutional response to the offer has been weak (a take up rate of just 67%), with key shareholder, Bruce Mathieson, allegedly passing on the offer. Also, the current ASX price of 61 cents doesn’t inspire confidence. I still think Star is “too big to fail”, but I can’t readily translate that to a floor on the share price. On balance, because I am so burnt from last time, I am inclined to sit this offer out. For the record, the analysts are bullish on Star over the medium term. According to FN Arena, the consensus target price is 95c.
Question 2: I recently applied for some shares in an IPO and instead of the shares going onto my CHESS account, I got sent a company holding statement with a Shareholder Reference Number (SRN). At the time, I think I quoted my HIN (Holder Identification Number). Why would this have happened? Will it be easy to transfer these shares to my HIN?
Answer: CHESS relies on exact names and addresses. If the ‘name format’ or ‘address format’ that you used on the IPO application form was different in some way to that of your CHESS registration (for example, you excluded your middle name), then it will create a new record and you will be issued with a Shareholder Reference Number.
It won’t be that hard to move the shares back onto your CHJESS account, but you will probably need to complete a name/address correction form. Contact your CHESS controlling participant (usually your broker).
Question 3: What do the analysts think of Macquarie Group (MQG)?
Answer: The broker analysts are generally bullish about Macquarie over the medium term, but some are worried about a tougher short-term environment impacting deal flow. According to FN Arena, the consensus target price is $189.88, about a 16.2% premium to the last ASX price of $163.40. The range is a low of $175.00 from Citi through to a high of $209.00 from Morgan Stanley.
Question 4: Is the downsizer super contribution means tested?
Answer: No. Anyone who qualifies can access it. There are four main criteria.
Firstly, you need to be over 55 years old. Secondly, you must have owned the primary residence you sell for at least 10 years. Thirdly, you can only access it once in a lifetime. Finally, you need to make the ‘downsizer’ super contribution within 90 days of the property settlement.
You can make a downsizer contribution of up to $300,000. A couple who jointly own a property can potentially each make a contribution of $300,000 – so $600,000 in total. The downsizer contribution is not counted against any super limits – so anyone who satisfies the criteria above can make it.