Question 1.
I currently have a large amount of cash in the one bank (BOQ) and wonder how seriously I should take the maximum bank guarantee of $250,000. Should I ensure no more than $250,000 is in any one bank and open new accounts at several banks? When I’ve asked the question to the bank, they have said that if our banks fail you will have more important things to worry about.
Answer by Paul Rickard
I probably wouldn’t take the money out. I don’t agree with the comment you got from the staff member, because BOQ is not big enough to be in the “too big to fail” category. However, there hasn’t been an actual bank failure in Australia since the great depression. When banks have got into trouble (there have been several cases, the last BankWest in the GFC, think the State Bank of Victoria, State Bank of NSW etc), the Government/Reserve Bank (now most likely APRA) has leaned hard on another Bank to take out the failing bank. I would expect this to happen again. No guarantees, however.
Question 2.
With regards to Platinum International, is there any difference between investing in the unit trusts by filling out an application or buying its shares on the ASX – (PTM, PIXX, PAXX)?
Answer by Paul Rickard
The new ASX listed funds (PIXX and PAXX) are feeders for Platinum’s main funds (Platinum International and Platinum Asia respectively), so there’s no difference to buying the units directly on the ASX or investing by filling out an application. PTM (Platinum Asset Management) is of course the fund manager itself, not a managed investment. If you buy shares in PTM, you are investing in the manager and the ability of the manger to grow revenue (ie more funds under management).
Question 3.
Mantra’s bid by Accor @3.96 the other week with potential special divy, which will be taken out of bid. Should I sell my shares at current price?
Answer by Paul Rickard
Thanks for the question. Subject to any ACCC concerns, it looks like the bid will go ahead. By the time the Scheme meeting is held and the court approves, it looks like shareholders won’t get paid until March 2018.
Upside on selling now: get the money now (approx. $3.89, less brokerage). Downside on selling now: miss out on the opportunity of a higher bid (unlikely). Wait till March upside: higher price $3.96, including special div (max 23.5 cents) which is likely to be franked. Downside: have to wait until March, and risk ACCC saying no or placing conditions
Line ball. If you need the cash and want to invest in something else, I would probably sell now
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 regards to your circumstances.
