Question 1: Why has the share price of hot fund manager Regal Partners (RPL) fallen so much?
Answer: I don’t think there is any specific company reason for the fall in Regal Partners Limited (RPL) share price, apart from the fact that it has had a great run and as an active manager of equity and credit funds, life will be harder in “less forgiving” markets to grow FUM and earn performance fees. Active fund managers always get hit when share markets get nervous.
From its mid-February high of $4.04, Regal Partners at a current price of $2.96 is off by 26.7%. In comparison over the same period, Magellan Financial Group (MFG) is off by 25.0% and Platinum Asset Management (PTM) is off 25.6%.
The analysts certainly like the stock, with a target price of $4.60, 55.4% higher than the current ASX price. However, if this market correction turns into a rout, fund managers like Regal will be hit hard. Performance fees will be crunched, FUM (funds under management) will fall (due to the market value of the assets, so management fees fall), and inflows will dry up or turn to outflows.
Question 2: It looks like the purchase of Arcadium Lithium (LTM) by Rio Tinto (RIO) was finalised last week. LTM shareholders will receive $5.85 cash per share, but I can’t find a date when this will be completed. LTM shares have been delisted from the ASX. When will I get paid?
Answer: Yes, shareholders will receive US$5.85 for each LTM share they own, approx. A$9.30 in cash. RIO is not particularly forthcoming about when this will be paid, and I can’t find the date or approximate date on their website or in any of their ASX announcements. The original announcement said that it expected completion in mid 2025.
Question 3: I own quite a number of ETFs (exchange traded funds). When I come to sell them, I sometimes find that the price on the ASX moves about quite a bit. This might make sense for ETFs that are linked to Australian shares, but it doesn’t seem to make sense for ETFS with international shares, as most of these aren’t trading during Australian hours. How do I know that I am not being “ripped off”?
Answer: Most ETFs appoint “market makers” (professional traders whose job is to keep the ETF trading on the ASX “around” the NTA or net tangible asset value). To keep the market informed, the ETF providers (Vanguard, BetaShares etc) publish the ETF’s NTA at the end of every business day and post it on their website. The “better” providers calculate an intra-day NTA (an “indicative” NTA) and publish this on their website. This is also timestamped. If the ASX market is efficient, the ETF should be trading around the indicative NTA.
So, before trading in an ETF, I’d always go to the provider’s website and check the “intra-day” NTA. This way, you won’t get “ripped off”.
Question 4: Audinate (AD8) starred in the reporting season but has fallen all the way back again. What do the brokers think?
Answer: Yes, Audinate (AD8) rallied from $7.58 before its profit release up to $10.41 after the announcement. It is now back at $6.79. Looks like a classic short covering rally. While the consensus target price is $9.41, which is 38.2% higher than the last ASX price, there is quite a range in broker forecasts. Macquarie has just downgraded Audinate and has a target price of $6.30, while Morgan Stanley has a target price of $11.00
