Question 1: How can I trade my Treasury Wine Estate (TWE) entitlements? What is the ASX code? How can I work out what they’re worth?
Answer: Treasury Wine Estates (TWE) is raising about US$900m through a pro-rata entitlement issue. For every 9.45 shares in TWE you own, you are issued 1 entitlement to but a new share at $10.80 per share. The entitlements are renounceable, which means that they can be transferred to somebody else. At TWE’s request, the ASX has established a market in the entitlements. They trade under the ticker TWER, the ‘R’ standing for a ‘right’ or ‘entitlement’. Trading in the entitlements stops on 16 November, allowing holders sufficient time to pay for the entitlements before the offer closes on 23 November.
The ASX trading price for an entitlement should be roughly the difference between the current TWE share price and the $10.80 subscription price. For example, if TWE shares are trading at $11.50, TWER should be trading at 70c. It doesn’t quite work that way due to the time vale of money, option value of the entitlements and other trading factors, but it will be close.
Question 2: Gold has gone for a bit of a rally, and I am wondering whether I should get some. Are there any ETFs (exchange traded funds) I can buy?
Answer: Yes, and probably my preferred way to invest in gold (through an ETF). Here is a link to an earlier article: https://switzerreport.com.au/is-it-time-to-buy-gold-and-how-can-you-do-it-2/ There are three established exchange traded gold funds quoted on the ASX. GOLD from Global X, QAU from Betashares and PMGOLD from the Perth Mint.
All the ETFs are backed by physical gold and have a strong record in tracking the gold price. BetaShares QAU hedges the currency exposure into Australian dollars, which means that it effectively provides exposure to the US dollar price of gold. The other two ETFs are unhedged, providing exposure to the price of gold in Australian dollars. They also allow for the units to be swapped back into physical gold.
My preference is to go for the largest and most actively traded ETF, GOLD. Adding to this group is a new ETF from iShares, iShares Physical Gold. It is trading under the ticker GLDN. It is like GOLD in that it is exposed to the Australian dollar price of physical gold. Its management fee is just 0.18% pa.
Question 3: What is your position on AVZ Minerals (AVZ’s) current voting recommendations for their AGM, given the stock has been suspended for 18+ months?
Answer: The situation at lithium and tin explorer/developer AVZ Minerals (AVZ), still suspended after 18 months, is most unsatisfactory. It is very difficult to know who to believe. In regard to the AGM and the “rebel Directors”, our inclination would be to back the existing Board and vote against the “rebels”. It doesn’t seem to make a lot of sense to almost cede control to a company (and their 3 nominees) that only owns 0.14% of AVZ. I am not convinced they are in a better position to resolve AVZ’s disputes.
Question 4: What is the last date to buy Westpac’s shares and pick up the 72c fully franked dividend? Can I also then participate in the DRP?
Answer: Westpac goes ‘ex’ dividend today, 9 November, so it is too late to buy the shares to get the dividend. It will be paid just before Christmas on 19 December. If you are an existing shareholder and want to participate in the dividend re-investment plan, or change your participation, it is not too late. You have until 5.00pm EST on Monday 13 November to make/update an election. Contact the share registry, Link Market Services.
