Question 1: I am about to commence a super pension. Do I have to make a pension withdrawal every month?
Answer: No, there is no rule about how often you must make a withdrawal. You can make it as often as you like, or perhaps once only, at the end of the financial year on 30 June. The only rule is that you must take out at least the minimum amount. The minimum amount is determined by your pension account balance at the start of the year, and an age based percentage factor. For example, if you are 65 and had $1,000,000 in your pension account of the start of the year, you must take as a pension at least 5% or $50,000. Your withdrawal could be spread equally in 12 monthly instalments or in a single amount on 30 June. It is up to you. If you start a pension mid-way through a financial year (for example now), the minimum amount is pro-rated according to the number of days to 30 June. For example, if you commenced a pension on 14 December, the minimum amount would be roughly half of the normal amount.
Question 2: I currently hold shares in Hastings Technology Metals and have done for a number of years. During this time there’s been a 1:20 consolidation and a gradual decrease in the share price. Should I cut my losses and run? Hang on or buy more to average down my cost base? In the past either James Dunn or Tony Featherstone have written articles for the Switzer Report about this stock. I would be grateful for any comments that you or your analysts may be able to offer.
Answer: Hastings Technology Metals (HAS) is certainly a stock for the “true believers”, given its “ambitious” rare earths project in WA. Apart from the technical complexities, the challenge for a company like this is the long lead time and project funding. Only one major broker, Macquarie, covers the stock. They recently re-affirmed a valuation of $0.93, which is about 46% higher than the last ASX price of $0.64. To quote FN Arena’s precis on the Macquarie analyst opinion: “Recently securing debt funding for the Yangibana rare earths concentrate project is a key positive catalyst for Hastings Technology Metals, in Macquarie’s view. The company has established an at-the-market equity financing facility for up to $50m with Alpha Investment Partners, giving management the option to raise capital gradually over a four-year period. Additionally, discussions are underway with multiple credit providers, according to management. The broker also highlights potential prepayments via offtake arrangements could improve the company’s cash position. The 93c target and Neutral rating are unchanged.”
Question 3: What do the broker analysts say about Real Estate.com (REA Group)?
Answer: The major brokers feel that REA Group (REA) is fully priced. The consensus target price is $157.50, about 5.7% less than the last ASX price of $167.01. There is quite a range in targets …from a low of $109.00 through to a high of $200.00. Of the six major brokers who track the stock, there is 1 “buy” recommendation, 4 “neutral” recommendations and 1 “sell” recommendation. On multiples, they have REA trading on 47.9x forecast FY24 earnings and 41.4x forecast FY25 earnings.
Question 4: What do you think of the proposal to delist the NB Global Corporate Income Trust (NBI)? Should I vote in favour?
Answer: Unitholders in the NB Global Corporate Income Trust (NBI) will be asked to vote at a meeting on 5 February on a proposal to delist the trust from the ASX. They are being sent an explanatory memorandum. The idea is that as an open-ended unit trust, unitholders should be able to realise their investment at a price that is closer to the underlying net asset value. At the moment, NBI trades at a discount to NAV (around 10%). The arguments for and against are set out in a brief and quite easy to read explanatory memorandum. I think they broadly make sense and intend to vote “yes”. There are, of course, some downsides.
