Question: I am looking at buying Primary Health Care. What is your opinion of the stock in light of its fall in price and possible legislative changes?
Answer (by Paul Rickard): I have been wrong on this stock – it dropped by exactly 50% in calendar 2015. Unfortunately, the company has provided no guidance on the impact of the change announced on 15 December in the MYEFO (mid-year economic fiscal outlook) statement.
While Primary looks horribly oversold, I am a bit wary on jumping back in because:
- I have been so wrong on the stock; and
- The short sellers have been active – and even in the latest ASIC figures, 6.27% of the shares are short sold.
Question: I’m worried about my super as I just turned 60 and am concerned about proposed government changes. What are the changes being touted in summary? How soon might they come in and will they be grandfathered?
Answer (by Tony Negline): The Government has announced that early this year they will release a Tax Green Paper, which will contain a range of options they’re considering and ask interested parties to provide their thoughts. The expected timing of this paper is sometime in the next six to eight weeks.
Sometime later, they have indicated that they will release a Tax White Paper, which will contain form proposals to take to the election, which can be held anytime between 6 August 2016 and 14 January 2017, unless the government attempts a double dissolution election. In the meantime, we have a Federal Budget and election policies to be announced by all the major parties.
The bottom line is that it is too difficult at this stage to say with any certainty what the tax and superannuation landscape will look like.
The NAB/CYBG demerger
During the festive break, we had a number of readers asking questions regarding NAB’s demerger of its UK banks, Clydesdale and Yorkshire and what the transaction will mean for shareholders. Paul Rickard wrote a timely article on the transaction for Switzer Daily. You can read the article here.
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.
