I want answers.
OK, I am brand new in here and hope I don’t ask too many dumb questions. I am only here because of GOOGLE, so at least it is not my fault.
I am 74 and retired, and not had any shares since the mid 1980s up in Kalgoorlie. My wife and I would like to have a dabble in the Medibank thing, but need some guidance.
So, can somebody tell me what I have to do with regards to registering with a share trader, and how to get shares online, as being in Carnarvon I am 1000 Kms from the city. You will not offend me if you use kindergarten language as, I want to get it right. I am thinking of buying $1,000 worth to start with, and when they increase by 50% sell 50%. If that is a dumb plan please tell me as I am open to suggestions. I have Netbank and am fully familiar with all that money transfer stuff.
GO.
You don’t need to sign up with a broker for an IPO. (the prospectus details this) Any shares you are issued will be under the Issuer Sponsored register. Link for more info
When you go to sell is when you need a broker to place the transaction into the share market. A full service broker can use the Issuer sponsored number to process the transaction. (but you will pay a high brokerage charge for the convenience), ring any full service broker – they will be happy for the ticket (likely cost you in the $75-$100 range) Link
A discount broker is much cheaper ($19-$29) BUT you will need to spend some time in filling out paperwork, providing certified identification, providing bank details etc. They don’t want to make it hard for you to give them money however so will make it easy as possible on you. Use this link above to also find a discount broker.
Ok I’ve now had a chance to go through the prospectus. Since this is the biggest privatisation since TLS I’m getting a lot of queries about it. Any IPO will have red flags in it, the question is whether the positives outweigh the negatives. I’d be interested if anyone else see’s some red flags. (Not that I’m focussing on the negatives, I’m just talking about these aspects to use the forum as a sounding board).
1) Asset allocation post listing in the investment portfolio will change from a 82%-12% Conservative-growth to 75%-25%. (Growth is direct shares and managed funds) This will increase risk slightly, but has the potential to create a larger income stream from that activity. It’s a double edged sword however, increasing allocation towards growth assets is most effective in a bullish market, not one that is consolidating. There’s little I can see about the track record of this area to justify the increased allocation towards this activity.
2) Much of current Management activity has been on cost control exercises over the last couple of years, yet upon listing much of this hard work will be undone when the management see a significant increase in their remunerations. George Savvides will triple his current remuneration to 4.99m. The Board will also receive increases in remuneration.
3) The token politician on the board is Anna Bligh, who was diagnosed in June last year with Non-Hodgkins Lymphoma. Whilst I wish Anna good health, the reality is that she will likely not be a long-term member of the Board, and board instability (particularly the token political board member) is never a good look. It might be my cynicism talking but it smacks a little “jobs for the girls”. Thanks very much, sorry about your ill-health, don’t forget your big pile of scrip you got in the IPO.
4) Lack of listed peers. A lot of commentary seems to be out comparing to NHF, Medibank is being priced at about 17 times it’s earnings, when bank shares are are sitting around the 13 times and a larger dividend yield and Mkt Cap to boot. It’s important to look not just at the nearest but find the bigger picture. 17 times is saying that some of those gains that could be made, by aggressive cost cutting, increased efficiencies are already priced in.
5) Institutions know the above. They will play games to get the Insto price book build as low as possible. The advantage to retail clients is if there is sufficient demand to force the bookbuild price above $2. (the govt have capped at this level), meaning insto’s will have to pay a higher price to get the allocation they want. Pre-registrations does not equal – guaranteed applicants. only one in six policy holders took up the pre-registration.
Cheers
Sir O
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