Barramundi ( BRM )

[alokdhir]

Thanks for your thoughts and I remember the KFL warrant exercise arbitrage very well.

To my mind (at least and I accept others will have a different view) the BRM and MLN situations are different to KFL.
KFL's outperformance on average of 2.5% per annum is not especially notable or material and I would back myself to do better than that, (and have consistently done so over the years), so the benefits KFL brings to me include :-
1. Diversification of my N.Z. portfolio
2.Tax free yield.
3. Regular warrant issues which I back myself to value and take advantage of opportunities to acquire on advantageous terms when they occur.
4. Shares in lieu of dividend at a 3% discount which further boost my effective yield.
5. Expert fund manager that is beating the market after fees and costs.

On the other hand BRM and MLN's average outperformance is far more notable.
Benefits to me are far greater and include :-
1.Much greater diversification to my portfolio, both funds have a much wider spread of shares than KFL
2. Both are investing in markets that I don't invest in directly and don't have the time for the research involved
3. Substantially higher outperformance compared to their benchmark's than KFL
4. They take care of all the FIF tax hassles which would be very time consuming for me if I was to try and handle overseas investments myself
5. Tax Free PIE yield.
6. Regular warrant issues which I back myself to value and take advantage of opportunities to acquire on advantageous terms when they occur.
7. Shares in lieu of dividend at a 3% discount which further boost my effective yield.

To me the benefits of BRM and MLN are clearly greater than with KFL. Would I pay the current unprecedented premium to NTA with MLN and BRM ? No.
Would I pay some more modest premium reflecting the advantages to me of these funds in these unprecedented times of extraordinarily low interest rates ? Yes.
What is the size of the premium to NTA I would pay ? I don't know, I am trying to work that out.

Understand your requirements better now ...U know very well what works for u and why ...like the clarity of your thought process .

KFL portfolio is very easy to replicate too . But not of MLN ...
Normally I see such inefficiencies and large arbitrage possibilities during the last stages of a Bull market ...that part worries me
Though state of financial markets and stances of Central Bank and Governments is telling me ...Nothing to worry for 2-3 years at least ...but U never know

[alokdhir]

Really irritating, perhaps that was the idea. (Sometimes really irritating marketing is the most effective)
Thanks for your post which is the kind of feedback I was looking for.
You'll remember when these were trading at a deep discount to NTA, (If I remember correctly it was as much as 20% at one point).

Three questions for you.
1. Given clear outperformance of the investment teams appointed, (from memory about 3.5 years ago) is so different to the performance before that under the previous investment teams is some premium to NTA warranted and would you pay any premium and if so how much ?
2. They have a capital management strategy as you know that buys shares back when they are over a 8% discount to NTA so do you think as a further addendum to that they need a new capital management strategy that sells shares when they are at more than an 8% premium to NTA ?
3. A new policy like this would enhance overall returns for shareholders wouldn't it ?

I know this post is not directed towards me but still I thought I should share my thoughts about your proposals

Just like Smart shares ETF which has Vanguard as their market makers ...means they provide both sell and buy side quotes on NZX based around daily NAV of the fund . If Fisher managed listed PIEs can do something similar then it will become more market friendly and efficient . No need to issue warrants then to increase corpus as if they do well then people can continuously buy them from them only on the NZX ...so from close ended funds they become open ended but only at NZX like Smartshares .
That will be my suggestion to them !

[SPC]

Yes our posts are crossing. Good inputs tho. Regarding the issue if valuing the nta vs market premium or discount Fisher also operates unlisted unit funds that are identical to the listed funds so that offers more transparency at the cost of opportunity..when it arises.
Regarding capital management strategy..don't assume the manager wouldn't sell its own shares and buy them back where profit can be made?. Being a closed end fund the money has to be made somehow.

[Beagle]

Maybe the manger should sell shares when they're at an 8% premium or more ?

[SPC]

I assume they already do ;)

[alokdhir]

I assume they already do ;)

Thats what I dont like ...non transparent practices ...they will be better off having very transparent and market friendly policies so that all types of investor's interest is safeguarded ...That way Smartshares ETF s have superb practices . They provide liquidity on NZX in all kinds of situations unlike Fisher Funds whose buyers run away in troubled time like in march ...it had a free fall from 175 to 105 in 15 days with hardly any volumes . Agreed all went down but they had volumes to let someone exit if they wanted ...
Yes I know they have a very similar ...not exactly same ( It has Serko and Xero in it too ) open fund called NZ Growth Fund at Fisher Funds ..but it has 14 days turn around transactional time frame...
Providing liquidity on NZX based on last days NAV will go a big way in making them outstanding funds for the masses .

[SPC]

I said I assume. Any active fund manager buys when prices are cheap and sells when they overshoot to the point of silliness. That applies to portfolio stocks and most likely the master stock as well...infact I would expect them too in my interests as a part owner of the business. Not the managers fault if the market throws up opportunities either way. March was good buying..I ran toward the fire not away. As I said earlier...work out when yo accumulate and when yo sell. That's what taking a punt on the markets is about.

[SPC]

And something more I need to add here. Don't confuse NAV of the underlying assets with the daily BRM/ KFL/ MLN market price. The fund mangers issue NAV data each week on a Thursday and also EOM as at 31st. What buyers and sellers trade the headline shares at is beyond the fund managers control.
Like many holders of these shares I appreciate times when the headline shares are both under and over NAV.
If you only wish to buy in and sell out at NAV then these listed funds aren't the correct vehicle...the unit funds would be.

[alokdhir]

And something more I need to add here. Don't confuse NAV of the underlying assets with the daily BRM/ KFL/ MLN market price. The fund mangers issue NAV data each week on a Thursday and also EOM as at 31st. What buyers and sellers trade the headline shares at is beyond the fund managers control.
Like many holders of these shares I appreciate times when the headline shares are both under and over NAV.
If you only wish to buy in and sell out at NAV then these listed funds aren't the correct vehicle...the unit funds would be.

Have a look at Smartshares model of trading via market maker on NZX based on daily and current NAV of the ETF like TNZ / NZG/ FNZ ...then u will understand better what I am advising Fisher Funds to do with their listed PIEs .
Their portfolio management and picks is good but their investor care is not up to scratch as they are not trying to look after all kinds of investors ...keep in mind not all investors are smart and market savvy ...they need to be protected from pitfalls of stock markets ...

In my view for Fisher Funds this listed PIE business is too small as they have much larger corpus in other funds not listed ...so they not trying to be investor friendly .

Where as Smartshares being a NZX promoted company has partnership with Vanguard ...the worlds largest ETF operators and with that they bring world class knowledge and experience including investor care .
As they only follow indexes so no portfolio choosing or picking part they do but still Fisher can learn their investor care to give best of both worlds at same place .

Here will like to highlight that in longer term say over 7 years ...KFL / BRM / MLN have not outperformed headline indexes by too big a margin ...maybe due to compounding effect of big difference in management fees .

The most efficient stock market investment for lay or even market savvy investors is NZG which has exactly same composition as our headline index without any caps of maximum 5% like FNZ ...it follows our index fully ...if market up 2% NZG is up 2% . It has fund charges of only 0.2 % compared to KFL 1.5 % plus performance fees of 1.25% almost every alternate year .

On 7 years term KFL returns almost matched index returns to an investor after all charges and tax . They are also PIEs so tax efficient

Though I like the portfolio expertise of Fisher funds but want them to be more investor caring by trying to remove market or man induced aberrations in their prices . Which can be easily done if they choose to follow Smartshares model of having a continuous market maker on NZX .

[777]

Who cares if there are investors not smart and savvy. I like the way the funds are run now. If you don't then go find some that are different. Don't try and fix something that is not broken.

[SPC]

Yes I was about to say the same myself.
This is the market at work...one man's trash is another's treasure. I am very comfortable with our transparent and continuously disclosed market doing what it does... offering opportunities to buy and sell. Trademe for shares!.
Note also that BRM LTD KFL LTD and MLN LTD are individual corporate companies...they only hire stock picking from Fisher funds. They have independent boards and staff. You are welcome to nominate yourself for the board if you feel change is needed!

[alokdhir]

Thanks for your encouragement mates . Big fish eats small fish works well everywhere ...

Trying to suggest to look after untrained investors ....

Also who says I cant work with this system or dont like golden opportunities given to me by these funds at the cost of .... Thought fairer market will help expand equity culture in NZ also ...we have only 5% stocks investors compared to 60-80% in other countries ...maybe now I know why so ...lol

[SPC]

I think you are trying to fit a square peg in a round hole. The listed pie funds and unlisted unit funds invest in approximately the same underlying stocks but they operate in different ways to meet different needs. They do this to suit investor preferences. The unit funds don't suit me and others for reasons of liquidity and pricing opportunity.
Nothing to do with big fish vs small fish although I do note that barramundi and marlin are both fish and they look like tasty ones to me.

[kiwico]

The most efficient stock market investment for lay or even market savvy investors is NZG which has exactly same composition as our headline index without any caps of maximum 5% like FNZ ...it follows our index fully ...if market up 2% NZG is up 2% . It has fund charges of only 0.2 % compared to KFL 1.5 % plus performance fees of 1.25% almost every alternate year.

An even cheaper option for the equivalent of NZG might be the Simplicity fund outside of KiwiSaver at 0.10% fund charges (plus $20 pa). Of course you have to put up with Sam Stubbs and his overreaching holier than thou approach (now he's no longer an active manager) and no SKC, ZEL or GNE (from memory). I was briefly with Simplicity KiwiSaver but the sanctimonious walk on water approach became a bit too much.

[Beagle]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/BRM/362887/334658.pdf

Interesting disclosure. Looks like the dog is in good company. Carmel Fisher is pretty astute judge of a good opportunity and has been buying up the Barramundi warrants, more than 1.2 million at 13 cents. No prizes for guessing what I have also been doing :D

[alokdhir]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/BRM/362887/334658.pdf

Interesting disclosure. Looks like the dog is in good company. Carmel Fisher is pretty astute judge of a good opportunity and has been buying up the Barramundi warrants, more than 1.2 million at 13 cents. No prizes for guessing what I have also been doing :D

Very interesting !!

[Beagle]

Think she bought ordinary shares BRM and not warrants .... still maybe same product eventually ...buying at 12% premium to Nav ...very very interesting ...Does she know something which we dont know ...

Read the whole disclosure especially the price paid on the second page mate. To the best of my knowledge NZX rules requires disclosure of shareholdings on a look through basis, (i.e. as if the warrants have already been exercised). She knows something the dog does. The warrants are good value.

[alokdhir]

[QUOTE=Beagle;855412]Read the whole disclosure especially the price paid on the second page mate. To the best of my knowledge NZX rules requires disclosure of shareholdings on a look through basis, (i.e. as if the warrants have already been exercised). She knows something the dog does. The warrants are good value.[/QUOTE

Read both pages ...it says on page 1243883 shares acquired on market ...page 1 ...on page 2 gives details of her other interest in the company derivatives which is number of warrants held by her ie 1123144 ...which corresponds to 1 for 4 shares original allotment for her prior holding as mentioned on page 1 ie 4492575 ..

But how much she paid for BRM shares final amount not mentioned on page 1 ...just says acquired on market 1243883 making new total as 5736458 ...

CSL ...Vaccine maker is top holding of BRM ...which is already started making covid vaccines !!

[Beagle]

Yeap...been a busy day...finally got a good look at it and got it. Price disclosure on the shares acquired on market is missing and should have been disclosed. Warrants are as you said, 1:4 based on original holding.

Quite interesting that she appears to have been paying well north of NTA for over 1.2 million shares on market.

[Beagle]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/BRM/363129/334966.pdf

I can't help wondering what Carmel Fisher is up to buying BRM shares up large at such a premium to NTA ?

[freddagg]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/BRM/363129/334966.pdf

I can't help wondering what Carmel Fisher is up to buying BRM shares up large at such a premium to NTA ?

The latest NTA I can find is 0.7575 on the 4th November, ASX 200 up over 9% since then.
Would she have much a much more accurate valuation than us ?

[Beagle]

The latest NTA I can find is 0.7575 on the 4th November, ASX 200 up over 9% since then.
Would she have much a much more accurate valuation than us ?

How you worked it is how I work it but I would think its highly likely she has built her own model with a spreadsheet of holdings which updates continuously. Something I must get around to doing at some stage seeing as I have "a few" warrants now. Bit harder for us mere mortals because we don't have right up to the minute shareholdings and details of the degree of forward exchange cover if any. All that said I do think she has been paying a material premium so I will await with interest this afternoon's NTA announcement.

[TideMan]

This purchase of warrants by Carmel, Beagle, and others........
Is it for the expected rise in the value of the warrants?
Or is it for the conversion of the warrants into shares next Oct?

If I buy n warrants, doesn't that commit me to paying out $n*0.86 next Oct? In which case, I need to be careful not to over-commit.

[justakiwi]

Most are buying with the intention of exercising the warrants next year, at whatever the exercise price is.

You can buy warrants between now and then, but you are under no obligation to exercise them until the cut-off date next year. If you decide not to exercise them you can sell your warrants on the market.

I always set aside the amount I will need to exercise - so that money is there if I decide to go ahead.


This purchase of warrants by Carmel, Beagle, and others........
Is it for the expected rise in the value of the warrants?
Or is it for the conversion of the warrants into shares next Oct?

If I buy n warrants, doesn't that commit me to paying out $n*0.86 next Oct? In which case, I need to be careful not to over-commit.

[alokdhir]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/BRM/363129/334966.pdf

I can't help wondering what Carmel Fisher is up to buying BRM shares up large at such a premium to NTA ?

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MLN/363133/334967.pdf

She bought more then 100k MLN shares around 1.22 on 10th Nov ...a day before warrant exercised shares hit the market to bring price down 5%

Very interesting things she doing in shares of companies she is a director of ....

[Beagle]

Most are buying with the intention of exercising the warrants next year, at whatever the exercise price is.

You can buy warrants between now and then, but you are under no obligation to exercise them until the cut-off date next year. If you decide not to exercise them you can sell your warrants on the market.

I always set aside the amount I will need to exercise - so that money is there if I decide to go ahead.

Thanks I do the same. It is highly likely in my opinion that the warrant exercise price on 29/10/2021 will be 64 cents (70 cents less dividends paid in the next year which I estimate at 6 cents in total).
With the shares currently at 90 cents and the exercise price likely to be 64 cents, (difference obviously being 26 cents), the warrants would appear to confer quite some value especially when one starts to think about their leverage into an economy recovering from Covid in 2021. I hold plenty of warrants and want more.

[FatTed]

Mr B what is the long term stratergy for BRM, KFL and MLN. Obviously one cannot always have enough cash to exercise the warrants?
Do you sell your warrants or some of them. Pretty rapidly(25% increase each year) if one bought all ones warrants these funds would become most of your portfolio.

[Beagle]

The last warrant exercise for BRM was Nov 2019 and the next isn't until late October 2021 so nearly 2 years between the last two issues so that doesn't present a problem to me as I am headed upwards in my intention to hold these excellent fully managed investments in this group but as you suggest, some people may need to sell shares to afford to exercise their warrants.

[seadog]

Carmel buying more BRM and MLN today, and here was me thinking of taking some profits....

[alokdhir]

Carmel buying more BRM and MLN today, and here was me thinking of taking some profits....

In markets every decision will end up in regrets in hindsight as either u sold too early or too late ...as perfect timing never happens ..

So a very wise man has said .... " Sell and regret is better then not sell and regret " implies when sold early ...atleast u got some profits ...if too late then profits gone ...:p

[alokdhir]

https://www.sharetrader.co.nz/images/misc/quote_icon.png Originally Posted by kiora https://www.sharetrader.co.nz/images/buttons/viewpost-right.png (https://www.sharetrader.co.nz/showthread.php?p=859518#post859518)
I have been thinking along the same lines as alokdhir for a while now regarding how it will end for all their funds.
I invested in their KS & listed funds in the early days but switched a few years ago.

For a portfolio for someone approaching retirement with little savings(not me) I split a third of the funds into 5 listed shares in 2007 at $10,000/share

2007 $10,000 MLN value now $9520.It has received quarterly dividends of around
8.5 c/year https://marlin.co.nz/assets/Uploads/...nd-History.pdf (https://marlin.co.nz/assets/Uploads/Marlin-Dividend-History.pdf)
Adds about $10,400 ?
Total value $19920 slightly more if dividends were reinvested
According to the investor center value would be around $33000 now
https://marlin.co.nz/investor-centre...o-performance/ (https://marlin.co.nz/investor-centre/portfolio-performance/)
2007 $10,000 IFT value now with DRP $46,367 plus a few other dividends
As it turns out 2007 was a good time to invest in IFT
https://infratil.com/for-investors/
2007 $10,000 FPH value now with DRP $136,360

It would be interesting to have done the same with MFT & EBO in hindsight


Just another real life example of experience with these funds .

DYOR please

[Beagle]

For the calendar year, Barramundi returned +26.3% (gross), well in
excess of the benchmark index’s +2.7%.

Quarterly update is out. http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/BRM/366419/339011.pdf

I believe that Barrmundi warrants offer a really good opportunity for share price appreciation between now and their exercise date of 31 October. 20 cents.
Disc: I have a substantial holding in Barrmundi warrants.

[justakiwi]

Great result. What do you anticipate the exercise price being?

[777]

Great result. What do you anticipate the exercise price being?

64c..........

[Rawz]

For the calendar year, Barramundi returned +26.3% (gross), well in
excess of the benchmark index’s +2.7%.

Quarterly update is out. http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/BRM/366419/339011.pdf

I believe that Barrmundi warrants offer a really good opportunity for share price appreciation between now and their exercise date of 31 October. 20 cents.
Disc: I have a substantial holding in Barrmundi warrants.

27% premium!! That is outrageous, no? It will take ~1.5 years of the 3yr or 5yr annualized return to eat into the premium.

Does it historically run at such a premium? If no, I would only be buying warrants that I intended to exercise. Rather than a heap with an eye on a capital gain.

[Beagle]

Is it outrageous when they are absolutely thrashing the market ? I met Robbie Urquart (Chief investment officer) at the last annual meeting and I think he's a very smart guy.
I wouldn't buy the shares at the current price but the warrants offer outstanding leverage to a recovering economy in Australia and I note the Australian market is on a forward PE of only about half the N.Z. market (source Harbour Asset management research) and their market was up less than 3% last year.

I think the Australian market could really boom this year. 30%+ wouldn't surprise me.

[clearasmud]

Is it outrageous when they are absolutely thrashing the market ? I met Robbie Urquart (Chief investment officer) at the last annual meeting and I think he's a very smart guy.
I wouldn't buy the shares at the current price but the warrants offer outstanding leverage to a recovering economy in Australia and I note the Australian market is on a forward PE of only about half the N.Z. market (source Harbour Asset management research) and their market was up less than 3% last year.

I think the Australian market could really boom this year. 30%+ wouldn't surprise me.
All ordinaries still below 2007 highs.

[dabsman]

I've got a lot of BRM and quite a few warrants. I find it hard to closely monitor more than about 10 shares so this is great to get some limited Australian exposure. I agree with Beagle I think these will run hard this year - and of course 2% a quarter into DRP is always nice. It was good timing entering the banks when they did. I was buying lots of WBC but Ishould have bought more ANZ looking at how they have diverged :(

[dabsman]

Pretty happy with BRM over $1. NTA moving nicely up the last few weeks means better dividend and therefore a better warrant strike price as well

[777]

Pretty happy with BRM over $1. NTA moving nicely up the last few weeks means better dividend and therefore a better warrant strike price as well

The dividend depends on the NTA rather than the market price.

[dabsman]

The dividend depends on the NTA rather than the market price.

Yep exactly what I said. Hoping for 1.68c or higher next dividend

[alokdhir]

[QUOTE=777;881994]The dividend depends on the NTA rather than the market price.[/QUOTE

" NTA moving nicely up the last few weeks means better dividend "

Thats what he wrote ...NTA up so better dividend ...

18% premium to NTA ...is some record or so for such listed funds though ...Shows us how much demand is there for reliable dividend flow and tax advantage

[FatTed]

[QUOTE=777;881994]The dividend depends on the NTA rather than the market price.[/QUOTE

" NTA moving nicely up the last few weeks means better dividend "

Thats what he wrote ...NTA up so better dividend ...

18% premium to NTA ...is some record or so for such listed funds though ...Shows us how much demand is there for reliable dividend flow and tax advantage

What do you think is a reasonable % premium to pay for these funds for those higher tax payers?

[alokdhir]

[QUOTE=alokdhir;881997]

What do you think is a reasonable % premium to pay for these funds for those higher tax payers?


Historically they have always been on discount to NTA ...but now times have changed ...Tax advantage increased from 5% to 11 % for high earners and demise of term deposits for regular income ...so maybe 5-7 % is still justifiable for current conditions ..

For high earners there dividend / return gets boosted by 39/28 factor ..

[777]

Yep exactly what I said. Hoping for 1.68c or higher next dividend

My bad. Sorry.

[Not too Flash]

[QUOTE=FatTed;881998]


Historically they have always been on discount to NTA ...but now times have changed ...Tax advantage increased from 5% to 11 % for high earners and demise of term deposits for regular income ...so maybe 5-7 % is still justifiable for current conditions ..

For high earners there dividend / return gets boosted by 39/28 factor ..

Premium over NTA now 28% - surely this can't be sustainable .....

[alokdhir]

[QUOTE=alokdhir;882001]

Premium over NTA now 28% - surely this can't be sustainable .....

Its just ridiculous levels ...amazing what lack of supply and momentum can do ....

Almost same story for MLN due to new warrant issue announcement

KFL is better with just ( lol ) 10% premium ...but keep in mind KFL warrant issue will also come in next 3 months

[justakiwi]

Nope. Already been and gone in March ;)

BRM warrants coming up in October though.



KFL is better with just ( lol ) 10% premium ...but keep in mind KFL warrant issue will also come in next 3 months

[oldtech]

Glad I picked up the warrants I wanted a bit earlier in the month :)

(Well ... the warrants I could afford, anyway. Wanted a lot more ...)

Paid a bit over the odds, but still looking cheap compared to yesterday's closing price!

[alokdhir]

Nope. Already been and gone in March ;)

BRM warrants coming up in October though.

I was talking about new warrant issue of MLN already announced and of KFL in the pipeline ...was not referring to ongoing warrant issue of BRM

MLN record date for prorata allotment of warrants is 14th May

[dabsman]

Glad I picked up the warrants I wanted a bit earlier in the month :)

(Well ... the warrants I could afford, anyway. Wanted a lot more ...)

Paid a bit over the odds, but still looking cheap compared to yesterday's closing price!

I'm up 150% on the warrants :) Will convert as total cost with bought warrants, free warrants and guessimate of exercise price will be 75c. Cant complain

[oldtech]

I'm up 150% on the warrants :) Will convert as total cost with bought warrants, free warrants and guessimate of exercise price will be 75c. Cant complain

Well done! I was late to the party, but should still be doing well come October.

[dabsman]

I've been buying head shares a week or two before dividend each quarter for the last 5 quarters. Will convert all warrants and keep buying small amounts each quarter. DRP is great for accumulating a big position as its quarterly and tax paid in the majority and at a 3% discount :)

[justakiwi]

What KFL warrants issue “in the pipeline?” I haven’t seen anything about another potential issue :confused:


I was talking about new warrant issue of MLN already announced and of KFL in the pipeline ...was not referring to ongoing warrant issue of BRM

MLN record date for prorata allotment of warrants is 14th May

[777]

What KFL warrants issue “in the pipeline?” I haven’t seen anything about another potential issue :confused:

Just look at the frequency each of the three companies announce them. I speculate that the KFL one will be before the end of this year. Perhaps as late as next Mar. Exercise of warrants 12 months later.

May not happen of course.

[justakiwi]

Ah ok. I thought he/she was talking about something already confirmed. Thanks for clarifying.


Just look at the frequency each of the three companies announce them. I speculate that the KFL one will be before the end of this year. Perhaps as late as next Mar. Exercise of warrants 12 months later.

May not happen of course.

[alokdhir]

What KFL warrants issue “in the pipeline?” I haven’t seen anything about another potential issue :confused:

If u observe the trend of new warrant issues ...MLN got last exercised in Nov last year and new got announced in April this year ...if we keep the same timeline then KFL which exercised in March this year should have a new one announced around August / Sept .

Most likely to happen as they will like to cash in on the appetite for listed PIE's

[alokdhir]

Latest NAV show ...BRM 28% Premium ....MLN 18% and KFL 10% ...Makes KFL safest bet if looking for tax free dividends

[tim23]

Latest NAV show ...BRM 28% Premium ....MLN 18% and KFL 10% ...Makes KFL safest bet if looking for tax free dividends

Pre Covid they traded at 10% discount or more most of the time, seems out of whack to me.

[oldtech]

Currently at $1.13 ... 35% premium ... crazy.

What's driving this?

[teabag]

It's an absurd premium over NTA. Interestingly, the options, BRMWF are at $0.34. With a likely strike price of $0.64, even BRM's upward volatility can't explain the difference. Sold all my modest BRM holding a few weeks ago, but still have the options.

Can't believe that the 8% "dividend" can be the only driver of the increase, surely?

[alokdhir]

Something cooking at all listed Fisher Funds ?? BRM is totally crazy at 35% premium with warrant issue going on ...while MLN at 28% as new warrant issue coming and KFL at only 11% premium lagging behind ...KFL will be having warrant issue in near future ...

But hard to explain why suddenly so much interest ...maybe suits retirees and high income earners very well

[winner69]

Something cooking at all listed Fisher Funds ?? BRM is totally crazy at 35% premium with warrant issue going on ...while MLN at 28% as new warrant issue coming and KFL at only 11% premium lagging behind ...KFL will be having warrant issue in near future ...

But hard to explain why suddenly so much interest ...maybe suits retirees and high income earners very well

People just buying a ticker code - good divie and price has been going up so it must be good and they tout great returns

Not everybody is as clever as us lot and many wouldn't even know NAV is - so doesn't really have a bearing on where share goes these days

[Dlownz]

I sold out at 1.13. Brought WHS instead. Good 20%gain

[alokdhir]

People just buying a ticker code - good divie and price has been going up so it must be good and they tout great returns

Not everybody is as clever as us lot and many wouldn't even know NAV is - so doesn't really have a bearing on where share goes these days

Such participants dont make vibrant and stable markets ...as such can start selling also if the trend reverses for a while ...they make actual long term holders feel scared ...:scared:

[justakiwi]

Mmmm …. guess I fall into the “not clever” category then.



Not everybody is as clever as us lot …

[alokdhir]

Mmmm …. guess I fall into the “not clever” category then.

:p LOL .....U r very clever ...U r growing your wealth the right way ...not speculating nor trying to be over smart by timing the market ...Slow and steady is the best path to growth

[justakiwi]

Not 100% sure that you’re right about that, but I’ll take it. Thanks ;)


:p LOL .....U r very clever ...U r growing your wealth the right way ...not speculating nor trying to be over smart by timing the market ...Slow and steady is the best path to growth

[winner69]

I reckon a few astute investor / traders are selling while at current high premiums (cashing in on a bonus) and will be buying back when things are more normal.

[alokdhir]

I reckon a few astute investor / traders are selling while at current high premiums (cashing in on a bonus) and will be buying back when things are more normal.

35% premium is more like lotto win ...give me on KFL ...I will sell all promptly ...:p

[GTM 3442]

Where would BRM et al fit in the U.K. Investment Trust universe?

https://www.trustnet.com/fund/price-performance/t/investment-trusts?tab=fundOverview&IsTrustnetITSpecialistVct=false

[Sideshow Bob]

BRM - Announcement of Warrant Exercise Price (BRMWF) - NZX, New Zealand’s Exchange (https://www.nzx.com/announcements/378981)

13/9/2021, 9:46 am MKTUPDTE13 September 2021
Announcement of Warrant Exercise Price (BRMWF) – Barramundi Limited
Barramundi Limited (Barramundi) wishes to advise all Barramundi Warrant Holders (BRMWF) that the final exercise price of the warrants is $0.64.
Further details regarding the Barramundi warrants, which have an exercise date of 29 October 2021, will be emailed/mailed to all warrant holders during September 2021.

[dabsman]

BRM - Announcement of Warrant Exercise Price (BRMWF) - NZX, New Zealand’s Exchange (https://www.nzx.com/announcements/378981)

13/9/2021, 9:46 amMKTUPDTE13 September 2021
Announcement of Warrant Exercise Price (BRMWF) – Barramundi Limited
Barramundi Limited (Barramundi) wishes to advise all Barramundi Warrant Holders (BRMWF) that the final exercise price of the warrants is $0.64.
Further details regarding the Barramundi warrants, which have an exercise date of 29 October 2021, will be emailed/mailed to all warrant holders during September 2021.

I thought the exercise price was 70c less four paid dividends which was 6.35c?

[777]

I thought the exercise price was 70c less four paid dividends which was 6.35c?

It is always rounded.

[dabsman]

It is always rounded.

Thank you I wasnt aware of that. Makes a difference luckily not too much

[777]

Thank you I wasnt aware of that. Makes a difference luckily not too much

Always amazes me that buyers of the head share, after the XD date, don't buy the warrant. Figure that a lot of investors do not know exactly what a warrant is.

[alokdhir]

At todays prices there is a 6% arbitrage opportunity for BRM holders ...sell head shares and buy warrants to exercise on 29th Oct to get head shares back . Risk free 6% on offer !!

[Beagle]

Yes the warrants are better buying than the head shares for sure.

[SPC]

There will be 'up to but not exactly' 20 percent more shares issued once warrant exercise takes place. That should in theory bring the market price down via NTA dilution. In theory.
Pre div was the time to sell circa 110c and restock at 64c ps plus price of any warrant top up buys on market.
I never take DRP shares. Take cash instead for market dip opps and regular warrant issue exercise.
Not alot of holders are active holders I gather. It's a passive approach for some.

[Beagle]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/BRM/379052/354652.pdf

Disc: I have built up a large stake in Barramundi warrants and will exercise them all on 29 October.

[alokdhir]

Very soon Head share may become cheaper then warrant's option ...lol

At present thru warrant route is 64+ 36 = $ 1.00

At NZX its $ 1.03 ....just 3 cents left to bridge ...:t_up:

[Beagle]

VWAP of the shares so far today is $1.0479 which suggests a fair market value for the warrants of $1.0479 - 64 cents = 40.79 cents and no brokerage is payable by investors on the 64 cent exercise. Shares issued with the exercise of the warrants on 29 October will be eligible for the December quarterly dividend.

[alokdhir]

Keep watching this space for next 45 days till the exercise date of 29th October ...Then observe how the dynamics of that date changes SP of both Headshare and Warrants ....

Both will be at their lowest point 10 days before exercise ....IMHO

[Beagle]

Keep watching this space for next 45 days till the exercise date of 29th October ...Then observe how the dynamics of that date changes SP of both Headshare and Warrants ....

Both will be at their lowest point 10 days before exercise ....IMHO

Maybe, maybe not. Some hound has a lot of dry powder and thinks that Barramundi management are doing a fantastic job, the Australian market is fundamentally much better value than the NZX and these give an awesome tax free dividend yield.

[alokdhir]

[QUOTE=Beagle;909715]Maybe, maybe not. Some hound has a lot of dry powder and thinks that Barramundi management are doing a fantastic job, the Australian market is fundamentally much better value than the NZX and these give an awesome tax free dividend yield.[/QUOTE

In my numerous experiences with these warrant issues I have noticed that in the last 30 days the technicals of the demand and supply takeover fundamentals completely ...as too many are trying to complete their trades before expiry

[JeffW]

VWAP of the shares so far today is $1.0479 which suggests a fair market value for the warrants of $1.0479 - 64 cents = 40.79 cents and no brokerage is payable by investors on the 64 cent exercise. Shares issued with the exercise of the warrants on 29 October will be eligible for the December quarterly dividend.

Possibly a dumb question, but would not the Head Share be expected to fall a little once the warrants are exercised, to take into account dilution effect, especially as the shares are trading at a premium?

[Beagle]

Possibly a dumb question, but would not the Head Share be expected to fall a little once the warrants are exercised, to take into account dilution effect, especially as the shares are trading at a premium?

You would think so but that's not what I have observed over the years with various warrant exercises within the group. What I have seen suggests the exact opposite, that the head share price is not materially affected.

The market is saying that Marlin and Barramundi and also to a fair extent Kingfish's management teams are adding significant value with their consistent outperformance of the market over the last few years and therefore their shares are worth a material premium to asset backing based on the exceptional skills of the management team. I agree with the market's assessment.

One of my wealthiest clients (worth a heck of a lot of money), with decades of investment experience recently bought a sizeable allocation in Marlin based on their consistent and substantial outperformance over the years.

[Biscuit]

Possibly a dumb question, but would not the Head Share be expected to fall a little once the warrants are exercised, to take into account dilution effect, especially as the shares are trading at a premium?

The market will have anticipated the dilution by now, well before the warrants are exercised.

[alokdhir]

BRM buyers needed ...Mainly sellers only ...430,000 vs 18000 market depth in favour of sellers .

1.01 todays low ...Very soon Headshare cheaper then warrant route

[alokdhir]

BRM warrants dropping faster then Headshares ....If this goes for a week then we maybe able to get a deal around 25 cents on Friday ...:eek2:

[dabsman]

The problem with people saying buy warrants and sell head shares to pick up more etc etc is you need depth in the last week or two and if everyone is considering a similar thing you might become a price taker and not able to wait for the prices you want. I just got all my free ones and bought more than what I need as soon as they listed. No need to worry about all that fluffing about. I was buying head shares each quarter before divvy but got too many now. Will just use the 2 yearly warrant issue to keep accumulating along with the DRP which absolutely grows your holding nicely even without the nice share price increases seen

[FatTed]

Talking of warrants, is there enough time to buy warrants on 27th October and exercise them on the 29th October, does it matter which Bank you belong to?

[alokdhir]

Talking of warrants, is there enough time to buy warrants on 27th October and exercise them on the 29th October, does it matter which Bank you belong to?

U can ...last day of trading is 27th Oct ...then u can exercise them online on 29th Oct before 5 pm ...if not on ASB then do 2-3 hrs earlier as all major banks do EFT every 1-2 hours on working day . But why cut it so fine !!!

[FatTed]

Thanks Just asking for a Friend!

[Beagle]

Got "hundreds" of these and happy to exercise them all. The investment team have done a stellar job of outperforming the ASX in recent years and I expect that will continue. I think the prospects in a recovering world economy for the ASX (average forward PE multiple according to Harbour Asset Management is only just a little over half the NZX) are very good.

It'll be good to have a decent stake and sit back and let them do some of the work for me.

[alokdhir]

The only fear of holding Fisher Funds listed funds like BRM , MLN and KFL is steady dilution of the premium they currently command ...10-20% over their current NAV

This is a new development and there is no precedence of this ( used to be slight discount to NAV always ) in last 15 years or so .

New similar funds may try to oversupply to satiate this exuberant demand after all its easy to duplicate their regular NAV return based dividend model

Eventually it will go back to normal which is NAV or little below thus current SP maybe overpriced .

Even some outperformance by funds to markets will be eroded by premium dilution for long term holders entering now on current SP ...IMHO

[Beagle]

The only fear of holding Fisher Funds listed funds like BRM , MLN and KFL is steady dilution of the premium they currently command ...10-20% over their current NAV

This is a new development and there is no precedence of this ( used to be slight discount to NAV always ) in last 15 years or so .

New similar funds may try to oversupply to satiate this exuberant demand after all its easy to duplicate their regular NAV return based dividend model

Eventually it will go back to normal which is NAV or little below thus current SP maybe overpriced .

Even some outperformance by funds to markets will be eroded by premium dilution for long term holders entering now on current SP ...IMHO

I acknowledge your concerns and you're right in a historical context about pricing relativity to NTA there is no argument about that, however now that the new investment teams in this group have been in place for a few years there is growing market acceptance that not only is their consistent market outperformance truly remarkable, (very few professional mangers can outperform an index after fees and expenses on a consistent basis) but the market appears to believe its repeatable.

My contention is that one is buying not just the assets of the fund but the upfront STEEPP stock selection processes and the investment expertise that goes into that as well as the very close monitoring of each companies performance. I was very surprised to learn of their extensive company visiting program at last years BRM annual meeting even during Covid. While I agree it would be quite easy to replicate their distribution policy of 2% of NAV each quarter getting the investment analyst expertise, professionalism and systems to replicate such sustained and significant market outperformance is something I think would be exceptionally hard to do.

By paying slightly above NAV one is saying they first and foremost put real value in the professionalism of the investment analysts and secondly there is value in the structure of the company. I note a 15% premium to NTA still gives 8 / 1.15 = ~ 7% net return which for most investors on a 33% tax rate = 10.4% gross return.

I'm happy to put my money where my mouth is in a substantial way as an average annual outperformance of 8.6% per annum after fees and tax over the last three years is truly exceptional. You don't achieve outperformance like that by luck, its achieved with very rigorous and disciplined stock selection methods, dedication, professionalism and exceptional investment talent. http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/BRM/379052/354652.pdf

[dabsman]

Im not worried about dilution or premium. My warrants will cost me 75c total (including the 1 for 4 free ones and I also bought quite a few around 10c) to exercise and NTA is 90c ish. It really depends on your position when you talk premium

[oldtech]

I have a "noob" question, if some kind person could please help. :)

I have filled out the online Exercise form (and received an email confirming my application), and made the payment via direct credit. Am I right in saying there is nothing else I need to do? I don't need to fill in and return the hard-copy form I was sent, do I?

[SPC]

Nope all done.

[oldtech]

Nope all done.

Thanks SPC! :t_up:

[777]

I have a "noob" question, if some kind person could please help. :)

I have filled out the online Exercise form (and received an email confirming my application), and made the payment via direct credit. Am I right in saying there is nothing else I need to do? I don't need to fill in and return the hard-copy form I was sent, do I?

The shares won't be issued to you though until after the closing date. (29/10/21)

[dabsman]

I'm waiting till around the 20th. Keep that cash in the revolving credit another couple of weeks

[peat]

The shares won't be issued to you though until after the closing date. (29/10/21)

something I investigated. a shame about this !

could've recycled over and over.

[SPC]

The exercise date of 29 10 2021 was set a year ago. Share allotment normally takes place the week following.
What could there possibly be to investigate?

[peat]

The exercise date of 29 10 2021 was set a year ago. Share allotment normally takes place the week following.
What could there possibly be to investigate?

whether you could exercise the warrants prior

lol you havin a dig at me trying to fully understand a derivative investment?

[Beagle]

Warrant terms are here https://barramundi.co.nz/assets/Investor-Centre/Barramundi-Warrant-Terms-2020.pdf
I note the shares are scheduled to be allotted on 3 November.

[peat]

Warrant terms are here https://barramundi.co.nz/assets/Investor-Centre/Barramundi-Warrant-Terms-2020.pdf
I note the shares are scheduled to be allotted on 3 November.

imagine if you could have exercised and received prior!!

buy 32 +64 sell 100 over and over .... I just thought it was worth checking out ;+) #

[SPC]

I think we are all still waiting for perpetual motion to be invented..

[dabsman]

imagine if you could have exercised and received prior!!

buy 32 +64 sell 100 over and over .... I just thought it was worth checking out ;+) #

Better is buy for 0 + 64 and sell for 100 and you only need to hold for a week

[SPC]

Best was to release stock a month or 3 ago at 108 -110 and restock at 64 😉
I call it TSR-plus..

[Not too Flash]

Keep watching this space for next 45 days till the exercise date of 29th October ...Then observe how the dynamics of that date changes SP of both Headshare and Warrants ....

Both will be at their lowest point 10 days before exercise ....IMHO

Getting close to 10 days from exercise date ....

[Not too Flash]

Buy back still on @ 8% discount to MV - hope that's a long way off ....

[justakiwi]

Does anyone here hold BRM with Sharesies? If you received the warrants application email from them, does the application link work for you? Not working for me.

[justakiwi]

Never mind. They have fixed it.


Does anyone here hold BRM with Sharesies? If you received the warrants application email from them, does the application link work for you? Not working for me.

[dabsman]

Has everyone has filled their metaphorical warrant boots? Exercised my free and bought ones - average price just on 70c a share so I'm happy. I'd expect a 6c head share price drop on issue from dilution. Is that in the ballpark or is my maths out?

[alokdhir]

Has everyone has filled their metaphorical warrant boots? Exercised my free and bought ones - average price just on 70c a share so I'm happy. I'd expect a 6c head share price drop on issue from dilution. Is that in the ballpark or is my maths out?

Yes to NAV dilution from 95% warrant exercise will be around 6 cents but it may not translate into SP down 6 cents as premium will widen .

But still expect selling pressure after newly minted BRM come to people on next Wednesday 3rd Nov ...We may see 97 Cents ...good time to grab more

[Beagle]

Yes, and I think its a great time to be transferring assets out of N.Z.
In terms of the premium to NTA I think there are three key reasons its fully justified.

Robbie Urquhart and his team have been doing an outstanding job for years and substantially outperforming the Australia indices so you are investing in quality assets and very high quality professional investment skills.

The structure of BRM with its tax free dividends of 8% per annum...this sort of yield is unbeatable.

Future warrant issues.

As I get older I am really happy to have really high quality investment professionals manage some of my money for me with the lower work load that brings on me and the significantly better portfolio diversification. I will hold indefinitely this time.

[peat]

Has everyone has filled their metaphorical warrant boots? Exercised my free and bought ones - average price just on 70c a share so I'm happy. I'd expect a 6c head share price drop on issue from dilution. Is that in the ballpark or is my maths out?


yes. going to take all them up

It was interesting reading the blurbs out last week and reviewing their holdings.

Slight weird aspect for me is that they will remain under my NZ portfolio - using the Direct Broking Jarden platform - because they are denominated (and listed obviously) in NZ. Whereas to me they represent Australian investments

[Beagle]

yes. going to take all them up

It was interesting reading the blurbs out last week and reviewing their holdings.

Slight weird aspect for me is that they will remain under my NZ portfolio - using the Direct Broking Jarden platform - because they are denominated (and listed obviously) in NZ. Whereas to me they represent Australian investments

How did you go mate ? I got 600K at an average of 12 cents.

[Waltzing]

Mr B as always, Nice numbers on this one and yes time to move stuff off to places else where as they open up a bit but eastern europe is now locking down again on low Vac numbers and is there a lesson there?

Pays to be careful where off shore still.

Aus probably a FAV..place to be on the market.

China in limbo and why do off shore investmentors put money into bonds there still but they are.

Aus the place to be for next year but the RBA hasnt stepped in to lower the yield curve for next year.

[Onion]

How did you go mate ? I got 600K at an average of 12 cents.

That's what a call a big dog bowl full!

[Beagle]

Yes...When they listed in November 2020 at 7.5 cents I hunted down as many as I could get my paws on.

[peat]

How did you go mate ? I got 600K at an average of 12 cents.

I just picked up a few in the mid thirties since you mentioned them. I'm using them as a way to build diversification into my Australian portfolio where my own efforts have been a bit average.

[dabsman]

I just picked up a few in the mid thirties since you mentioned them. I'm using them as a way to build diversification into my Australian portfolio where my own efforts have been a bit average.

Exactly what I use it for. And DRP quarterly really grows your portfolio not to mention 18 to 24 month rights issues :)

[Beagle]

I just picked up a few in the mid thirties since you mentioned them. I'm using them as a way to build diversification into my Australian portfolio where my own efforts have been a bit average.

For what its worth mate I gave up on trying to stock pick in the Australian market many years ago, after also having some pretty average success. The way the team at Barramundi have comprehensively beaten the Australian market in recent years there's no point me trying to beat them !

[peat]

I actually went to the trouble of phoning in and confirming that payment had been receipted.
Wouldnt want them to expire !

[Beagle]

I actually went to the trouble of phoning in and confirming that payment had been receipted.
Wouldnt want them to expire !

LOL Yeah I understand and I was VERY careful with my paperwork too.

[Waltzing]

What with the LOW PE.

no one believes they can keep crossing the line? inflation bow wave keep the SP down.

[Beagle]

What with the LOW PE.

no one believes they can keep crossing the line? inflation bow wave keep the SP down.

Its a managed fund mate so the realised earnings from one year to the next will be variable depending on what positions they sell from one year to the next.

[Waltzing]

Yes exactly!

[winner69]

Its a managed fund mate so the realised earnings from one year to the next will be variable depending on what positions they sell from one year to the next.

Exactly

Whats more relevant is the weighted average PE of their holdings

You know what that is

[Beagle]

Exactly

Whats more relevant is the weighted average PE of their holdings

You know what that is

Good question and I started doing some work on that the other day but got interrupted and in hindsight that's probably a good thing. They have quite an interesting and eclectic mix of 24 companies. The bottom line for me is they're not just beating the ASX indices they're absolutely thrashing them year after year after year so I am happy to let them do all the thinking for me in Australia. In terms of me second guessing their strategy over there, I'm not going there in my head because their results speak for themselves. I like the lower workload that goes with this approach for me.
Try and outthink the Barramundi team or do more of this, its not a difficult choice lol https://www.youtube.com/watch?v=r1eJPJBBKQs

[Onion]

Its a managed fund mate so the realised earnings from one year to the next will be variable depending on what positions they sell from one year to the next.

And they don't always get things right - KFL with ATM, MLN with Alibaba and Tencent, can't comment on BRM.

But they (Fisher Funds) have good people and a good investment policy that seems to generate good returns over time.

I stood on the sidelines of their funds for a long time (I was wary of their dividend paid form funds strategy) but am now invested (MLN) and keen to buy MLN and BRM when the premium to NAV ever narrows or on any weakness.

[JoeM]

Hi All,

I have exercised some warrants and want to know how the rest of you update your portfolio in Direct Broking now that i see Computershare registry has been updated.

My thoughts were, to 'Sell' the BRMWF at the final price of 33.1, then create an 'Initial Position' in BRM at 97.1 ( 33.1 plus 64 exercise price ). I dont currently hold any other BRM shares.

Or do you enter at what the warrants cost you, plus the exercise price? my average warrant cost is 17.654.

Thanks in advance

[SPC]

You simply enter a buy transaction at the total cost of each warrant which is what the new shares have cost you.

[Beagle]

I agree with SPC. Warrants conferred the right to buy shares so the shares on average cost you 17.654 + 64 = 81.654 cents each.
My average warrant price, (mainly bought in November 2020) was 12.01 cents so my shares cost me an average of 12.01 + 64 = 76.01 cents each.

[JoeM]

I agree with SPC. Warrants conferred the right to buy shares so the shares on average cost you 17.654 + 64 = 81.654 cents each.
My average warrant price, (mainly bought in November 2020) was 12.01 cents so my shares cost me an average of 12.01 + 64 = 76.01 cents each.

Easy, thankyou for that

[777]

Too slow at typing. Question answered.

[alokdhir]

Only 91.53 % warrants converted thus reducing the NAV by roughly 5 cents per share .

Also 4.45 Million warrants appox lapsed inspite of huge discount to current SP

Highlights the pitfalls of such investments for buy and forget type people ...the ones who let their warrants lapse actually subsidised rest all by loosing value on their investment as NAV reduction of their Holdings .

So no free lunches in this world some get more for being proactive and well informed like Mr B and some loose out who let warrants lapse ...didnt even sell them

[dabsman]

Yes well the fund also misses out on 64 cents a warrant

[oldtech]

Only 91.53 % warrants converted thus reducing the NAV by roughly 5 cents per share .

Also 4.45 Million warrants appox lapsed inspite of huge discount to current SP

Highlights the pitfalls of such investments for buy and forget type people ...the ones who let their warrants lapse actually subsidised rest all by loosing value on their investment as NAV reduction of their Holdings .

So no free lunches in this world some get more for being proactive and well informed like Mr B and some loose out who let warrants lapse ...didnt even sell them

I exercised my warrants way back in September to make sure I didn't forget and let them lapse, or spend the money I had put aside on something else. :)

[peat]

hopefully some one knows of the top of their head
were they issued for free ?

[dabsman]

Yep 1 for every 4 shares held

[Ricky-bobby]

When do u think the next one will be?..

[SPC]

Whoa steady on mate. Got Marlin and then Kingfish to cough up for next. But 12 to 18 months is your answer.

[dabsman]

Within 6 months I think

[Ricky-bobby]

Two contrasting views there fellas!.. ok then, how low do u think sp will go in the next few days?…

[dabsman]

Two contrasting views there fellas!.. ok then, how low do u think sp will go in the next few days?…

Wont move from $1 give or take a cent. Divvy coming soon remember...

I think they are in 18 month cycles approx. so 6 months without warrant then an issue and 12 months (4 divvy) then exercise warrant and rince and repeat. Thats what I plan for but I'm often wrong

[Ricky-bobby]

Thanks Dab

[alokdhir]

Two contrasting views there fellas!.. ok then, how low do u think sp will go in the next few days?…

97 cents possible in next 1-10 days then divvy will bring it up ....Many have got new BRM at low prices due to free or earlier warrant purchases ...so some selling pressure ...but eventually it will recover to 20% premium to NAV like before ...may take 3 months to do that ...then look for next warrant offer in 9 months time

[Onion]

Thats what I plan for but I'm often wrong

I’m often wrong too …. but I may be wrong about that!

[dabsman]

I’m often wrong too …. but I may be wrong about that!

Going back a few years it looks 2 yearly cycles not 18 months

[justakiwi]

Has anyone exercised their warrants via Sharesies by any chance? Just wondering whether yours have been processed yet? Mine is showing that the order is completed, but the status is showing "processing" and my allocation has not yet been reflected in my balance. Has been sitting there like this for two days.

[alokdhir]

BRM latest NAV of 0.8628 is just 4 cents less then last one ...so after a weeks work and warrant exercised ...its down less then 4 cents ...not bad .

I know they have called it " UNDILUTED NAV " ...but actually its diluted after warrants issued to head shares in morning and NAV calculated at close ...they will amend it to call it Diluted latter hopefully ...

[Beagle]

BRM latest NAV of 0.8628 is just 4 cents less then last one ...so after a weeks work and warrant exercised ...its down less then 4 cents ...not bad .

I know they have called it " UNDILUTED NAV " ...but actually its diluted after warrants issued to head shares in morning and NAV calculated at close ...they will amend it to call it Diluted latter hopefully ...

Almost precisely where I expected it to be. My model had it at 86 cents post warrant exercise. Barramundi have an exceptionally talented investment team and a winning corporate structure. I love those 2% per quarter tax free dividends and the next one is due next month just in time for Christmas !

[SPC]

..sure you're not on the marketing team Beagle 😉?…nah it speaks for itself really 👍

[777]

For those interested the history of warrant issues is available for all three companies on their respective websites.

Just scroll to the bottom of page.


https://kingfish.co.nz/investor-centre/capital-management-strategies/

https://barramundi.co.nz/investor-centre/capital-management-strategies/

https://marlin.co.nz/investor-centre/capital-management-strategies/

[waikare]

For those interested the history of warrant issues is available for all three companies on their respective websites.

Just scroll to the bottom of page.


https://kingfish.co.nz/investor-centre/capital-management-strategies/

https://barramundi.co.nz/investor-centre/capital-management-strategies/

https://marlin.co.nz/investor-centre/capital-management-strategies/

Thanks, 92% were exercised this time, compared with 72% in 2019

[Beagle]

Be doing a lot of fossicking around for overseas opportunities and it came to my attention very recently again, (I confess I was aware of this years ago but forgot), that Fisher funds also run Australian and Global Growth managed funds and the investments in them appear to ostensibly mirror those in Barramundi and Marlin. Here's the latest quarterly update from Fisher funds regarding their Australian growth fund
https://fisherfunds.co.nz/assets/fund-updates/FFMF/Fisher-Funds-Australian-Growth-Fund-30-September-2021-Fund-Update.pdf You can see for yourself these investments mirror those of Barramundi.

I think people deserve to know that you can invest in these unit trusts without any premium to NTA which is why I am sharing this information.
Please DYOR on which opportunity is best for you either the listed company or the unlisted one which is also a PIE (Portfolio investment entity).
Disc: I am looking at shifting all Barrmundi and Marlin capital to their unit trusts under their private wealth management system. You need $500K minimum to be eligible. One can tailor their own dividend program under the private wealth system, e.g 0.667% per month = 8% tax free per annum.

There's nothing to stop people with any amount of money investing in their unit trusts at zero premium to NTA, no entry or exit fees apply (which is obviously cheaper than paying brokerage). More info here https://fisherfunds.co.nz/investment/managed-funds

No warrants are issued by the unlisted managed funds so that's one disadvantage and you won't get invited to annual meetings at the listed companies which put on a nice free lunch so that's another disadvantage but you are not paying a premium to NTA so all of your capital is working for you, not 85% of it because you paid a 15% premium to NTA or 80% of it working for you in Marlin because you paid a premium to NTA of 20%.

Just putting it out there. You decide what's best for you.

[SPC]

Beagle stop thinking and have a feed. And a snooze.

[Beagle]

Beagle stop thinking and have a feed. And a snooze.

Coffee and a walk in the park is a much better idea.

Food for thought. Never pay more than a dollar for a dollar's worth of assets.

[Onion]

Be doing a lot of fossicking around for overseas opportunities and it came to my attention very recently again, (I confess I was aware of this years ago but forgot), that Fisher funds also run Australian and Global Growth managed funds and the investments in them appear to ostensibly mirror those in Barramundi and Marlin. Here's the latest quarterly update from Fisher funds regarding their Australian growth fund .... You can see for yourself these investments mirror those of Barramundi.

...

Just putting it out there. You decide what's best for you.

Thanks very much for sharing Beagle. You've caused me to re-evaluate my plans. I haven't worked out the result of the re-evaluation as yet. But your suggestion that the fund eliminates the premium of BRM (etc.) is valid.

Other differences (advantages?) of Barramundi is the Dividend Reinvestment Plan that offers a discount and the occasional warrant gift.

I've compared the two offerings and they have an investment mix that is very similar. Even the commentary in the monthly updates is similar. You might expect that the returns would also be similar but I was surprised to see that the BRM listed fund has higher returns than the Aussie Growth Fund. Note that the "Total Shareholder Return" assumes the investor is using the DRP, and buying all warrants.

Probably the BRM "Gross Performance Return" is the most comparable. The BRM figures are before fees and the fund figures are after fees -- does this fully explain the difference?

I.e.









1 Month
3 Months
1 Year
3 Years (annualised)
5 Years (annualised)
7 Years (annualised)
Since launch (annualised)


To 31/10/2021
Barramundi
Company Performance




















Total Shareholder Return
-5.50%
-6.50%
23.90%
28.10%
20.50%










Adjusted NAV Return
-1.60%
6.50%
31.30%
21.80%
16.40%
































Portfolio Performance




















Gross Performance Return*
-1.50%
7.10%
35.10%
25.40%
19.80%



























PE 31/10/2021
Australian Growth Fund
Fund Performance**


26.80%
18.80%
14.90%
12.50%
9.00%



* before expenses, fees and tax,
** after fees and before tax

[Beagle]

Hi onion
Apples with apples, they're both PIE's and both investing in the same thing so ultimately must generate a very similar overall result. I haven't drilled down into the fine nuances but I suspect it costs them a bit more to run the listed company, with ongoing NZX listing fees, Computershare fees and annual meeting costs. I see the adjusted NAV return 5 years average of Barramundi in their Sept quarter update is 15.8% per annum so that's the net yardstick after fees http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/BRM/381443/357562.pdf Not sure why that's 0.9% different to the unlisted fund.
Issue of warrants is nice and are good to trade if one gets their valuation and timing right but they are NTA dilutive when exercised as we've recently seen. The only possible advantage for shareholders is that some warrant holders let them lapse and this may explain some or all of the difference in average annual return after fees and taxes in the last 5 years.

Total shareholder return is a bit misleading in that it encompasses a period when the share price premium to NTA changed quite a lot.

The way I see it this is basically a very, very close apples for apples comparison and those paying a 15-20% premium for listed investments in Barramundi or Marlin face:-

Firstly having between 15-20% of their investment not working for them, (i.e. they are only getting real returns on 80-85% of their capital which itself is not really a satisfactory situation as who wants 15-20% of their capital to be rendered "lazy" and not getting a return it could otherwise get ?) and secondly and potentially of significantly more consequence they face the distinct prospect at some stage of losing that lazy capital if the listed fund reverts to trading right at NTA and potentially even more loss of capital if the listed funds revert to their long term history of trading at a discount to NTA. This latter point is a real worry and should concern any prudent investor over the medium term because of the listed funds having such an extensive history of trading at a discount to NTA.

Those in the managed unlisted fund face none of those issues and no entry or exit charges and as mentioned before if you have over $500K in their private wealth management service one can design their own bespoke monthly or quarterly dividend plan or if less than that then its easy enough to withdraw 2% per quarter from the unlisted fund replicating the dividends of the listed ones.

Finally I can't help noticing in my research that the Fisher teams performance is well ahead of the market average no matter whether you're in the listed or unlisted investment but they're not the only ones beating the market after fees on average by about 5% a year, see the PIE funds Australian dividend fund performance which averages about 19% per annum since inception 10 years ago https://www.piefunds.co.nz/Investment-Services/Investment-Funds/Dividend-Growth I'm planning on throwing them a bone too.

I used to think I could justify the Barramundi premium to NTA with the fact that you're buying the investment expertise of the team but clearly there's no need to pay a premium to enjoy the same expertise. PIE funds also has no entry fees and while their base fee is higher at 1.85% per annum they don;t charge performance fees like Fisher funds do. Interestingly PIE funds Australian dividend fund is up just over 50% in the last year. Wish I'd tossed them a bone quite a while back.

Why is all this so important ? Frankly I'm losing a bit of confidence with where we are going as a country and its effects on the NZX overall and the thought of Labour possibly getting another term and us facing 5 more years of woke politics interfering with our capital markets in various ways is a really serious worry. I think its best to have at least 50% of one's capital invested overseas. For what its worth that's what I'm working my portfolio towards.

The irony that a simple smart shares index tracking S&P 500 ETF fund with no research has outperformed any of the above with a 16.7% average annual return over the last 5 years after fees and taxes isn't lost on me https://smartshares.co.nz/types-of-funds/us-shares/us-500
They'll probably get a bone thrown their way too.

[Rawz]

The thing that has always got me with the premium to NTA is if there was some major event or a period of underperformance you risked the value drop in nta + premium being wiped out. So a double whammy

[Onion]

The thing that has always got me with the premium to NTA is if there was some major event or a period of underperformance you risked the value drop in nta + premium being wiped out. So a double whammy


...potentially even more loss of capital if the listed funds revert to their long term history of trading at a discount to NTA. This latter point is a real worry and should concern any prudent investor over the medium term because of the listed funds having such an extensive history of trading at a discount to NTA.

At a Wellington branch meeting of the NZSA Sam Dickie (manager of the Kingfish fund) was asked about reasons for the premium over NTA (contrasted to the historical discount).

He said he didn't have an explanation for the premium. He didn't have a prediction about whether the premium would persist.

My suspicion is that the 39% tax rate has spurred high income investors to seek out investments that can keep them below the 39% threshold -- such as PIEs. As you say Beagle, the same tax-free "income" can be achieved by selling down units on a regular basis.

Incidentally, the InvestNow platform gives access to the Fisher funds (https://investnow.co.nz/fund-search/?_sft_fund_manager=fisher-funds) and a couple of PIE Funds (https://investnow.co.nz/fund-search/?_sft_fund_manager=pie-funds) offerings too (but not the Dividend Growth one). InvestNow makes it is easy to move money between investments (and to cash out units).

[Charlie38]

Those that have just exercised their "free" BRMWF @ 64cps now have a share with a NTA of $0.8622 cps. A significant discount to NTA!

Further these shares will participate in the Dec dividend (which I calculate to be approximately 1.79cps) which should be announced next week.

[Beagle]

Those that have just exercised their "free" BRMWF @ 64cps now have a share with a NTA of $0.8622 cps. A significant discount to NTA!

Further these shares will participate in the Dec dividend (which I calculate to be approximately 1.79cps) which should be announced next week.

Welcome to the forum and thank you for contributing to the debate. The problem is that in exercising the 1 free warrant for every 4 shares held the NTA of the shares held went down about 6 cps, (was previously over 90 cps) so the free warrant diluted the asset backing of the other shares to the point where the apparent gain on exercise creates no value for the shareholders overall. You can't make money out of nothing just taking the 1:4 free warrants. On the other hand if you buy truck loads of warrants dirt cheap, (once upon a time some dog bought hundreds of thousands of a previous issue at under 1 cent) and the shares subsequently go up a lot then its pay day !! Conclusion: The warrants can be an excellent value creator for people who can value them correctly and take advantage of any mispricing buying them in volume at times but they're not value accretive to shareholders per se.

Good feedback there Onion. Sam was wise to tread a diplomatic and careful line. Thanks for the link. Had a good chat with one of the PIE chaps the other day. Seemed to know his stuff pretty well I thought. He didn't skite about the 50% return in that Australian dividend fund...just let the figures do the talking. They have a European growth fund I am also considering. I'm thinking of spreading my 50% overseas allocation far and wide amongst some interesting ETF's and well proven fund managers.

I agree Rawz - There's a real risk of substantial capital erosion if for example Marlin go from a 20% premium to a 10% discount a whopping 30% of your capital could be wiped out :eek2: Anyone who's been investing in these things for any real length of time knows they have traded at a material discount to NTA the vast majority of the time.

My own theory for the premium is I think elderly investors got absolutely desperate for yield when term deposits hit 1% last year and couldn't resist the thought of 8% tax free and the vast majority are probably unaware of the risk they're running.

[SPC]

Don't forget Beagle that when the market trades at a discount to NTA you have the opportunity to pick up a bundle of underlying assets at a discount to their value and additionally the distribution plan of 2% AT NTA means you are amplifing the return on those discounted shares.
That's a good time to buy but a bad time to sell.
Share market investments and Unit Trusts are not the same game and shouldn't be compared. The market sets it value on the sentiments of buyers and sellers more often than intrinsic value. Opportunities occur to make over the odds or to fall short.
It's a market. The unit funds are set and forget vehicles for passive investors.
Holders of the listed funds should not treat them like unit trusts or try to compare returns. They require a degree of trading at key times to return the best value. That has been my experience and it has worked well.

[Beagle]

Don't forget Beagle that when the market trades at a discount to NTA you have the opportunity to pick up a bundle of underlying assets at a discount to their value and additionally the distribution plan of 2% AT NTA means you are amplifing the return on those discounted shares.
That's a good time to buy but a bad time to sell.
Share market investments and Unit Trusts are not the same game and shouldn't be compared. The market sets it value on the sentiments of buyers and sellers more often than intrinsic value. Opportunities occur to make over the odds or to fall short.
It's a market. The unit funds are set and forget vehicles for passive investors.
Holders of the listed funds should not treat them like unit trusts or try to compare returns. They require a degree of trading at key times to return the best value. That has been my experience and it has worked well.

Yes x 2. This is a time to sell and invest in managed funds instead which can easily be exchanged for cash in due course when the time is right and shares bought on market again.

[SPC]

Yep share market investment is not set and forget. A share position requires regular review to determine its performance and suitability to the holder. Over many years of ownership there will be ups and downs, times to unload and stock up.
Looking over at the kpg thread would a smart investor really hold the stock for say 27 years as an example and take no action at points in the cycle where intervention is sensible?..if so then you're in the wrong game. Performance is in the eye of the observer and how long his choice of measuring stick is ie. 1..2..5..10..20 yrs and where it is placed on the time line.
You can't usually sit there and do nothing..think A2..think RAK ..any share.
KPG no different. Applies to every stock.

[Beagle]

Yes agreed but its harder to make money when the tide is going out. Investing in housing, (even without leverage) would have made you 6 times the money of KPG over that timeframe. Investment in another property stock RYM would have made you 55 times your money. It's one thing to try and time stocks but its much easier on a rising tide than an outgoing one.

Anyway back to BRM. I will watch from the sidelines for a while.

[SPC]

Ok just reminding you of this post from not too long ago.(Sorry not the first time).
Nothing had changed apart from your mind..?

"The bottom line for me is they're not just beating the ASX indices they're absolutely thrashing them year after year after year so I am happy to let them do all the thinking for me in Australia. In terms of me second guessing their strategy over there, I'm not going there in my head because their results speak for themselves. I like the lower workload that goes with this approach for me.
Try and outthink the Barramundi team or do more of this, its not a difficult choice lol"

Honestly Beagle you're a little hard to keep track of ..

[alokdhir]

Seems like Mr B converted his BRM warrants to Headshares and cashed out soon after . Now suddenly the premium which was so strongly supported earlier in many posts has started looking shaky ...:D

Point well noted again and again . lol

[Beagle]

Ok just reminding you of this post from not too long ago.(Sorry not the first time).
Nothing had changed apart from your mind..?

"The bottom line for me is they're not just beating the ASX indices they're absolutely thrashing them year after year after year so I am happy to let them do all the thinking for me in Australia. In terms of me second guessing their strategy over there, I'm not going there in my head because their results speak for themselves. I like the lower workload that goes with this approach for me.
Try and outthink the Barramundi team or do more of this, its not a difficult choice lol"

Honestly Beagle you're a little hard to keep track of ..

I forgot they also run the same portfolio in their managed fund. Sorry I am not "purrfect"

[SPC]

And my nose wouldn't be a patch on yours.
But keep me posted when the listed fund does its next round of warrants 😸

..or the next opportunity to buy in to the listed fund at less than nta value..😉

[alokdhir]

I forgot they also run the same portfolio in their managed fund. Sorry I am not "purrfect"

I had pointed that out here both their Units portfolios and tailored HNI portfolio service . But at that time all were not very accepting . Also was said that special treatment is for LISTED Pies only not Units pies as they have variable rate tax structure as per individual slabs . They dont have quarterly tax free dividend but u can do withdrawals but that is not tax proof ...like listed PIEs dividend is FINAL tax paid already and no need even show or keep any records or file IR3 if u have only income from listed PIEs . Main reason why they so loved . Additional benefit is to 39% slab HNIs

[SPC]

I had assumed the hound slumbered in a basket with 2 sides and each morning was different. Now I think the basket is round.. crikey..😄

[Beagle]

I had pointed that out here both their Units portfolios and tailored HNI portfolio service . But at that time all were not very accepting . Also was said that special treatment is for LISTED Pies only not Units pies as they have variable rate tax structure as per individual slabs . They dont have quarterly tax free dividend but u can do withdrawals but that is not tax proof ...like listed PIEs dividend is FINAL tax paid already and no need even show or keep any records or file IR3 if u have only income from listed PIEs . Main reason why they so loved . Additional benefit is to 39% slab HNIs

Could it be that at the time it wasn't in some people's financial interest to be accepting :D
I would think it difficult for the IRD to make a case that replicating the same dividend distribution from a listed PIE with an unlisted PIE fund should attract a different tax treatment but confess I haven't looked into this and furthermore don't intend to as I'll probably not take any dividends from the unlisted PIE but sell the lot and reinvest in the listed company when the shares trade at a discount to NTA. BRM have a very long history of predominantly trading at a material discount to NTA and only a very brief one of trading at a premium.
Beagle's can be patient when all their capital is working for them, not 85% of it ;)

In the meantime I wouldn't rule out dabbling with buying future warrants on issue while holding the managed funds units...a VERY happy hunting ground for this old mutt.

[SPC]

The answer to the tax treatment of pies vs units lies in the introduction of the KiwiSaver scheme by the late Sir M Cullen.
It was designed this way to give investors choices.

[Beagle]

DYOR on PIE stuff.
https://www.ird.govt.nz/-/media/project/ir/home/documents/forms-and-guides/ir800---ir899/ir855/ir855-2021.pdf?modified=20210701222057&modified=20210701222057

https://www.ird.govt.nz/roles/portfolio-investment-entities/end-of-year-pie-calculation

[SPC]

Sorry B not being nasty my friend but by gum there are just too many of these to remind you of....you can't blame me.. after some of your recent posts 😉

from SEP:
"By paying slightly above NAV one is saying they first and foremost put real value in the professionalism of the investment analysts and secondly there is value in the structure of the company. I note a 15% premium to NTA still gives 8 / 1.15 = ~ 7% net return which for most investors on a 33% tax rate = 10.4% gross return.

I'm happy to put my money where my mouth is in a substantial way as an average annual outperformance of 8.6% per annum after fees and tax over the last three years is truly exceptional. You don't achieve outperformance like that by luck, its achieved with very rigorous and disciplined stock selection methods, dedication, professionalism and exceptional investment talent."

Just reminding...

[Beagle]

As I said earlier today I forgot they run a very similar managed fund which can be accessed with no premium to NTA.
I am eligible for superannuation in 5 years time and am sometimes forgetful these days. It is what it is.

[SPC]

Same here, we're still spring chickens mate..60 is the new 40 😸🐕. Years of investment fun ahead for us both.
Folks will work out what suits them but BRM took a bit of a pounding here this week. My issue with the unit funds was about getting out..for BRM sell today and 2 days you've cash in the bank. Exiting the listed funds requires a wait for the next valuation point... potentially painful in a falling market (and also the risk of suspension of things ever turn rough) then a wait for the cash. I've tried both.
Ok I'm done here on this one 😉🏳️

[Beagle]

60 is the new 40, I like it :t_up:

[SPC]

..........🤔

[dabsman]

BRM - Quarterly dividend of 1.81 cents per share

A bit higher than expected. I worked on 1.75c

[clearasmud]

60 is the new 40, I like it :t_up:

I liked this joke.
A 60 year old asks is 60 the new 50? Yes
A 70 y.o asks is 70 the new 60? AnswerYes
An 80y.o then asks is 80 the new 70.
They answer, no you're stuffed.

[waikare]

Those that have just exercised their "free" BRMWF @ 64cps now have a share with a NTA of $0.8622 cps. A significant discount to NTA!

Further these shares will participate in the Dec dividend (which I calculate to be approximately 1.79cps) which should be announced next week.

Your approx. calculations are very close to the actual dividend of 1.81cps to be paid on the 17th Dec., well done Charlie

[dabsman]

Very happy with DRP strike price and also nice NTA jump this week. Made back the divvy in NTA in 2 weeks :)

[Ricky-bobby]

I know! How good!

[Beagle]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/BRM/384548/361491.pdf

Total shareholder return last 3 months -7 % :eek2:

[Rawz]

I wonder why BRM and the others for that matter (KFL and MLN) never use their permitted 20% gearing. You would think at least during the crashes they would leverage up and double down on the companies in their portfolio

[dabsman]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/BRM/384548/361491.pdf

Total shareholder return last 3 months -7 % :eek2:

Who cares when we filled our boots with warrants Beagle?

[SPC]

Beagle's having a 'Beagle morning'.
Again.

[Beagle]

Who cares when we filled our boots with warrants Beagle?

It is unusual to see them underperforming the market. Hope its not the start of a new trend.

[Ricky-bobby]

A bit of a downwards trend starting… not many bids… hopefully their portfolio does a bit better this quarter!

[Beagle]

82.5 cents NTA today, down just over 3 cents in just the last week and 11.5 cents since the 94 cent NTA of early Sept 2021. Been a couple of dividends since then, 3.50 cents in total and the warrant issue dilution, (by my calculations diluted NTA by 5.95 cents), so a total of 9.45 cents of the 11.5 cent decline was caused by these two factors, (real adjusted decline since early Sept 11.5-9.45 = 2.05 cps = 2.2% against the ASX 200 down from 7540 in early Sept to about 7440 yesterday, just on 1.2% over the same period, (so BRM definitely underperforming the ASX200 a bit over the last 4.5 months). Yesterday's close of 97 cents https://www.nzx.com/announcements/385920 represented an 18% premium to NTA :eek2: (Not warranted in my opinion).

I worked this all out for my own benefit so I can understand whether to throw Fisher's unlisted Australian growth fund a bone or two but am left wondering if this is the start of a new trend where the high PE stocks BRM invest in exhibit relative underperformance to the market ? Certainly at the least I think its fair to say in the short term BRM's outperformance has stopped for now. Probably just sit on my hands for a while and review again in due course.

[Beagle]

Getting towards the end of the month and BRM are off to a shocking start in 2022 with year to date NTA now 75.99 cents down more than 10 cents from 86.1 cps where it started the year, WOW that's exactly a whopping 11.75% decline in less than a month !! whereas the ASX200 which as of yesterday's close is down 7% Year to date. 4.75% underperformance in just under one month is significant and shows their high growth, high PE stock selection is unsuited to the current reversal of trend towards value and growth at a reasonable price stocks. They are up a few cents today which is completely irrational given the huge fall in NTA in the last week and a further significant fall in the ASX today.

In addition to the above some of their bigger holdings are down 7-9% today like Wisetech and Xero for example.

I'm staying well away.

[Ricky-bobby]

Getting towards the end of the month and BRM are off to a shocking start in 2022 with year to date NTA now 75.99 cents down more than 10 cents from 86.1 cps where it started the year, WOW that's exactly a whopping 11.75% decline in less than a month !! whereas the ASX200 which as of yesterday's close is down 7% Year to date. 4.75% underperformance in just under one month is significant and shows their high growth, high PE stock selection is unsuited to the current reversal of trend towards value and growth at a reasonable price stocks. They are up a few cents today which is completely irrational given the huge fall in NTA in the last week and a further significant fall in the ASX today.

I'm staying well away.

Have u sold urs? Or still holding?..

[Beagle]

Have u sold urs? Or still holding?..

All sold...

[alokdhir]

With rates rising ...premium to NAV is fully irrational ...slowly they will vanish ...rates normal will make SP normal like before ...IMHO

KFL premiums are shrinking fast .

[Beagle]

With rates rising ...premium to NAV is fully irrational ...slowly they will vanish ...rates normal will make SP normal like before ...IMHO

KFL premiums are shrinking fast .

Their underperformance relative to the market will also start eroding the premium to NTA and once they start underperforming people may start switching Kiwisaver providers which together with their loss of default status Kiwisaver mandate I've alluded too before could lead to selling pressure of their favored stocks further exacerbating their problems.

[SPC]

Beagle...from Oct 28...
"As I get older I am really happy to have really high quality investment professionals manage some of my money for me with the lower work load that brings on me and the significantly better portfolio diversification. I will hold indefinitely this time.
Last edited by Beagle; 28-10-2021 at 12:37 PM.

[Beagle]

The world has changed mate...you either get that or you get steamrolled. If you want to succeed you need to be agile and adapt. What worked in 2021 may really hurt you in 2022. That's my key message for early 2022 which is a year of much higher interest rates, high inflation and reserve banks around the world radically reducing fiscal stimulus.

Just did a lot of work to update my model for BRM which as of a few minutes ago has their NTA at 73.20 cents down another 2.79 cents today from 75.99 cents yesterday, that's another 3.7% loss today against the ASX200 currently down just 1.5%.

That's a HUGE underperformance for their portfolio in January and the month isn't over yet !. . I think there's a high chance of ongoing material underperformance of BRM v the ASX200 for the foreseeable future.

I am mostly, (65%), in cash and short term deposits which is outperforming every other asset class this month !

That's my full update now. Please feel free to make use of this and earlier posts today or ignore it...I've done my bit to help others.

[SPC]

I haven't seen a 'steam roller' other than in a tractor museum so I'm not that concerned.
The sharemarket is a 10 year view not a 1 year view. Short term ructions are likely but this is where you find opportunities and that's the nature of the beast.
Don't want to be a nuisance to you B ..but...you know... crikey 😉

[Beagle]

Since that post in October in my opinion it has become pretty clear that a day of reckoning has come for the inflated share prices of tech companies. The last time this happened post the dot.com bubble of 1999/2000 burst it was more than a 2 year process of collapse and the NASDAQ lost ~ 90% of its value. History couldn't repeat, surely not...or could it ?

Sure investment is a long term process but risk mitigation and management along the way brings superior long term returns. The FF group do not strike me as being agile or quick to adapt.

[Beagle]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/BRM/387106/364351.pdf

NTA down a whopping 11% in January against a market drop of just on 6%, underperformed by 5% in just one month :eek2:

Down 8.9% in the last 3 months against a market down just 3.5% !

No resources stocks in their portfolio....surely that's very disappointing.

I struggle to see how their portfolio won't continue to struggle for the foreseeable future as value, growth, resources and commodity stocks appear far better positioned this year. They have some financial's so that's good.

[percy]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/BRM/387106/364351.pdf

NTA down a whopping 11% in January against a market drop of just on 6%, underperformed by 5% in just one month :eek2:

Down 8.9% in the last 3 months against a market down just 3.5% !

No resources stocks in their portfolio....surely that's very disappointing.

I struggle to see how their portfolio won't continue to struggle for the foreseeable future as value, growth, resources and commodity stocks appear far better positioned this year. They have some financial's so that's good.

Some great companies in their portfolio I would be proud to own long term.

[Beagle]

Some great companies in their portfolio I would be proud to own long term.

In the great tech wreck at the start of this millennium after the dot.com bust the NASDAQ lost 90% of its value. I think this is a "show me the money" type of market where earnings and sensible metrics REALLY matter. Of course the millennials have no recollection of such events because they weren't investing then so this time its going to be different...or is it ;) Easy enough to cherry pick their portfolio if one wants too.

I called it much earlier this year, BRM to underperform the ASX in 2022. Let's see how I go with that call.

Its good they tell people clearly what their thesis is so people know where they stand, excerpt from latest update:-

Our investment process is focussed on investing in high quality
and growing businesses with durable competitive advantages.
As we have alluded to before, we tend to find more investment
opportunities that fit our process in the technology and healthcare
sectors than in the materials, energy and utility sectors (where we
currently have no portfolio exposure).
Our relative positioning is largely responsible for our
underperformance during January.

[Ricky-bobby]

Some great companies in their portfolio I would be proud to own long term.

Is this why the big sell pressure has subsided? Looks like it will kick around 88-91 for a while…

[Ricky-bobby]

Looks to me like these sort of funds have currently lost favour in the market. Be interesting to see if they come back? I’m going to stick with it (small holding) as the divs get reinvested in and it just ticks along…

[waikare]

I have decided to split my BRM dividends 50% split cash and DPR both copies (DPR and cash) are identical. My question is the PIE tax information shown on both copies, for for tax purpose's one or two entries.

[777]

I have decided to split my BRM dividends 50% split cash and DPR both copies (DPR and cash) are identical. My question is the PIE tax information shown on both copies, for for tax purpose's one or two entries.

If half of your holding is on each statement then yes. DRP are still a distribution along with your cash distribution and have to be treated the same.

But what tax purposes are you talking about? The only figures that concern your tax return are the Gross Dividend and attached imputation credit. And only then if your gross income is below $48,000 is it worth considering.

[waikare]

If half of your holding is on each statement then yes. DRP are still a distribution along with your cash distribution and have to be treated the same.

But what tax purposes are you talking about? The only figures that concern your tax return are the Gross Dividend and attached imputation credit. And only then if your gross income is below $48,000 is it worth considering.

Thanks for your reply 777, I am very close to reaching the $48,000 tax bracket, I have just checked MY IRD and BRM is not listed among the dividends, I think the PIE Tax Information was last year. I'll check that out some latter in the week.

[777]

Thanks for your reply 777, I am very close to reaching the $48,000 tax bracket, I have just checked MY IRD and BRM is not listed among the dividends, I think the PIE Tax Information was last year. I'll check that out some latter in the week.

The IRD don't list the PIE distributions. If you want to include the above you have to enter them when you file your return.

[Ricky-bobby]

https://announcements.nzx.com/detail/391099 Thought there might have been some chat about this?.. haven’t done the warrant thing before and not sure if timing is right. Anyone else looking at it?

[777]

https://announcements.nzx.com/detail/391099 Thought there might have been some chat about this?.. haven’t done the warrant thing before and not sure if timing is right. Anyone else looking at it?

Nothing to look at really. You will be issued with them and you then have to decide before the exercise date next year whether to sell them or exercise them or let them lapse.

[oldtech]

https://announcements.nzx.com/detail/391099 Thought there might have been some chat about this?.. haven’t done the warrant thing before and not sure if timing is right. Anyone else looking at it?

I will look at it shortly. I bought into BRM last year by buying warrants on the market, and hence will be entitled to my share of the warrants, which I will take up. I will probably buy more on the market as well.

If you go back in this thread about 10 pages, you will find lots of discussion around the previous warrant issue there. justakiwi gave good explanation here:

https://www.sharetrader.co.nz/showthread.php?4071-Barramundi-(-BRM-)&p=856289&viewfull=1#post856289

Once the warrants are listed on 17 May you will be able to buy them up until the exercise date (26 May 2023). Just like any share they will vary in price so do your homework if you are intending to buy them.

[dabsman]

I was expecting the warrants around October. Nice surprise

[Beagle]

Getting towards the end of the month and BRM are off to a shocking start in 2022 with year to date NTA now 75.99 cents down more than 10 cents from 86.1 cps where it started the year, WOW that's exactly a whopping 11.75% decline in less than a month !! whereas the ASX200 which as of yesterday's close is down 7% Year to date. 4.75% underperformance in just under one month is significant and shows their high growth, high PE stock selection is unsuited to the current reversal of trend towards value and growth at a reasonable price stocks. They are up a few cents today which is completely irrational given the huge fall in NTA in the last week and a further significant fall in the ASX today.

In addition to the above some of their bigger holdings are down 7-9% today like Wisetech and Xero for example.

I'm staying well away.


The world has changed mate...you either get that or you get steamrolled. If you want to succeed you need to be agile and adapt. What worked in 2021 may really hurt you in 2022. That's my key message for early 2022 which is a year of much higher interest rates, high inflation and reserve banks around the world radically reducing fiscal stimulus.

Just did a lot of work to update my model for BRM which as of a few minutes ago has their NTA at 73.20 cents down another 2.79 cents today from 75.99 cents yesterday, that's another 3.7% loss today against the ASX200 currently down just 1.5%.

That's a HUGE underperformance for their portfolio in January and the month isn't over yet !. . I think there's a high chance of ongoing material underperformance of BRM v the ASX200 for the foreseeable future.

I am mostly, (65%), in cash and short term deposits which is outperforming every other asset class this month !

That's my full update now. Please feel free to make use of this and earlier posts today or ignore it...I've done my bit to help others.

Just updating those posts from late January. A few days ago I calculated that notwithstanding the March dividend payment (i.e. counting it in to total returns) BRM's NTA is down a whopping 11% year to date vs the ASX which was flat. Since then the ASX is down another ~ 2% so we will see how that pans out to their updated NTA today.

Great they are doing another warrant issue but I think that they have no meaningful allocation to the resources or base metals sectors and are still weighted towards tech. I think their asset allocation strategy at present isn't right for the times as we pivot more towards resources and value stocks.

I also think the exercise price of the WG warrants is "ambitious" and predicated upon a share price that's trading at an unwarranted premium to NTA.

I doubt this warrant issue will be a fertile hunting ground.

Disc: No holding.

[dabsman]

13 months is a long long time in this market. I think they will be well in the money with an excercise price around 81ish cents. Especially as a free carry

[Jiggs]

The name BRMWG.NZ has appeared under my BRM.NZ shares on my shareholding page. I have one for every 4 of my BRM shares.They cost me nothing and are apparently worth nothing.
I understand they are "warrants".
Can someone please tell me what are warrants and what I am supposed to do about them?
This message was on the Barramundi website but I don't understand what it means.
https://barramundi.co.nz/documents/general/offer-brm-new-warrant-issue-for-barramundi-limited-369382.pdf
Thanks.

[Sideshow Bob]

Hi Jiggs,


From their announcement:

New Warrant Issue for Barramundi Limited - NZX, New Zealand’s Exchange (https://www.nzx.com/announcements/391099)

The directors of Barramundi Limited (Barramundi) are pleased to announce that the company will undertake a pro rata offer of warrants to shareholders.

The purpose of the offer is to raise capital as part of Barramundi’s ongoing capital management programme and provide investors the ability to purchase additional shares in Barramundi at a pre-determined Exercise Price. The offer also aims to increase the size of the portfolio and improve operational efficiency. The net proceeds of the offer are expected to be used for further investment in the Barramundi portfolio.

On the record date, Barramundi shareholders will be issued one warrant for every four shares held. The record date for the issue is 13 May 2022 and the warrants are expected to be allotted on 16 May 2022.

Each warrant gives shareholders the right, but not the obligation, to subscribe for one additional ordinary share in Barramundi on the exercise date. The exercise date is 26 May 2023.

The exercise price will be $0.89 less any dividends declared with a record date during the period commencing on the date of allotment of the warrants and up to the announcement of the final exercise price. The final exercise price will be calculated and advised to warrant holders at least six weeks before the exercise date.

The warrants are expected to be quoted on the NZX Main Board from 17 May 2022 under the issuer code BRMWG.

[oldtech]

The name BRMWG.NZ has appeared under my BRM.NZ shares on my shareholding page. I have one for every 4 of my BRM shares.They cost me nothing and are apparently worth nothing.
I understand they are "warrants".
Can someone please tell me what are warrants and what I am supposed to do about them?
This message was on the Barramundi website but I don't understand what it means.
https://barramundi.co.nz/documents/general/offer-brm-new-warrant-issue-for-barramundi-limited-369382.pdf
Thanks.

They are certainly not worth "nothing"!

Warrants are an option for you to buy more shares. justakiwi wrote a summary here and there is plenty of discussion around them:

https://www.sharetrader.co.nz/showthread.php?4071-Barramundi-(-BRM-)&p=856289&viewfull=1#post856289

You will be able to buy and sell warrants from the 17th of May up until the exercise date (26 May 2023), and just like any share they will vary in price over time.

[justakiwi]

Where are you seeing this? Curious, because record date is not until tomorrow, so seems odd that you are seeing yours already.


The name BRMWG.NZ has appeared under my BRM.NZ shares on my shareholding page. I have one for every 4 of my BRM shares.They cost me nothing and are apparently worth nothing.
I understand they are "warrants".
Can someone please tell me what are warrants and what I am supposed to do about them?
This message was on the Barramundi website but I don't understand what it means.
https://barramundi.co.nz/documents/general/offer-brm-new-warrant-issue-for-barramundi-limited-369382.pdf
Thanks.

[777]

On the portfolio page jak providing you have your correct holding of BRM shares on there. They went ex today.

[justakiwi]

Thanks. Not showing up in Computershare for me. Will go check again though.


On the portfolio page jak providing you have your correct holding of BRM shares on there. They went ex today.

[777]

Thanks. Not showing up in Computershare for me. Will go check again though.

No it won't be as they have not got to the record date. I was referring to the portfolio in Direct Broking and no doubt ASB Sec will have the same.

[justakiwi]

Gotcha. I transferred mine out of Sharesies some time ago, so they are recorded with Computershare only. Not using a traditional broker. If I ever want to sell any I just transfer back into Sharesies for $5, and sell through them. Not that I plan on selling anything.


No it won't be as they have not got to the record date. I was referring to the portfolio in Direct Broking and no doubt ASB Sec will have the same.

[Monarch]

Gotcha. I transferred mine out of Sharesies some time ago, so they are recorded with Computershare only. Not using a traditional broker. If I ever want to sell any I just transfer back into Sharesies for $5, and sell through them. Not that I plan on selling anything.

I think the 5 dollar fee is only for transferring out of sharesies, back in is free.

[nztx]

I think the 5 dollar fee is only for transferring out of sharesies, back in is free.

Sounds correct - from Sharesies:


You can transfer shares in NZX listed investments in and out of Sharesies. It’s free to transfer in, and $5 NZD per investment to transfer out.

[justakiwi]

Wow. I did not know that! Even better then :)

Sharesies is far from perfect (still no DRP!) but I have to say, they are proving to be an incredibly useful tool for me. I use them to buy, and when I have accumulated X amount of whatever holding, I transfer out so I can take advantage of DRP if its offered, have my shares under my CSN, and vote at shareholder meetings etc. Being able to transfer in at no cost, makes it very cheap if I ever wish to sell. Plus, Sharesies confirmed that you can transfer in just a portion of a holding - I was concerned I might have to transfer the full balance over, but I don't.

So all in all, a very cheap way to sell, should I ever want to.


I think the 5 dollar fee is only for transferring out of sharesies, back in is free.

[Sideshow Bob]

Barramundi Monthly Update - June 2022 (nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com) (http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/BRM/393673/372726.pdf)

29% Premium to NTA

[Beagle]

Barramundi Monthly Update - June 2022 (nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com) (http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/BRM/393673/372726.pdf)

29% Premium to NTA

For an investment fund that's underperformed the index by more than 10% in the last year, WOW !

[Sideshow Bob]

Premium down to 22.1%....

Barramundi Quarter Update Newsletter June 2022 (nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com) (http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/BRM/395816/375203.pdf)

[waikare]

Challenging year for Barramundi
22/8/2022, 5:14 pm FLLYR
Results for announcement to the market
Name of issuer Barramundi Limited
Reporting Period 12 months to 30 June 2022
Previous Reporting Period 12 months to 30 June 2021
Currency NZ$

Amount (000s) Percentage change
(Loss)/Revenue from continuing operations (32,631) (157%)
Total (Loss)/Revenue (32,631) (157%)
Net (loss)/profit from continuing operations (34,645) (166%)
Total net (loss)/profit (34,645) (166%)

Interim/Final Dividend
Amount per Quoted Equity Security $NZ 1.36 cents per share
Imputed amount per Quoted Equity Security $NZ 0.00012630
Record Date 8 September 2022
Dividend Payment Date 23 September 2022
Current period Prior comparable period
Net tangible assets per Quoted Equity Security $0.64 $0.87

[Sideshow Bob]

https://www.nzx.com/announcements/409894

Barramundi warrants exercise price $0.83. Current price is $0.70.

You know there will be some exercised......:blink:

[Sideshow Bob]

:laugh: Hopefully the brokers are able to advise 70c < 83c so better to buy on market.....:huh:

https://www.nzx.com/announcements/409896

Barramundi Limited (“Barramundi” or “the company”) would like to advise brokers that it offers a broker handling fee in respect of the exercise of Barramundi warrants (“BRMWG”).
The exercise date is 26 May 2023, and the exercise price is $0.83.
Barramundi recognises there is an administration cost and time involved in the warrant exercise process for brokers and, as such, pays brokers 0.4% of the total consideration payable for warrants exercised per beneficial holder.
The company would also like to remind brokers that it has a long-term quarterly dividend policy whereby it pays 2% of average net asset value each quarter. All shares allotted upon the exercise of warrants on 31 May 2023 will be eligible for all future dividend payments, from June 2023 onwards.

[peat]

its a tricky decision!.
just as well they were freebies.

[777]

https://www.nzx.com/announcements/409894

Barramundi warrants exercise price $0.83. Current price is $0.70.

You know there will be some exercised......:blink:


Yep. 77,531

[Sideshow Bob]

Yep. 77,531

Bless, they must be much smarter than me......!!

[dabsman]

Pretty happy with 69c exercise price on the shiny new warrants. Less 4 divvies on top of that of course

[SPC]

I disagree. Earlier this year the last warrant round was priced at $.83. It was a fail. The next warrant round looks to be executed at approx $.63 in one years time!. This is hardly aspirational for the share price. Has the Board no ambition for the share price?. What message does this send?
Maybe it's time for the board to REALLY consider a change in investment manager after relentlessly reappointing Fisher at each and every 'five year review'...since 2006....where the stock IPOed at $1.00.....come on!

[Biscuit]

I disagree. Earlier this year the last warrant round was priced at $.83. It was a fail. The next warrant round looks to be executed at approx $.63 in one years time!. This is hardly aspirational for the share price. Has the Board no ambition for the share price?. What message does this send?
Maybe it's time for the board to REALLY consider a change in investment manager after relentlessly reappointing Fisher at each and every 'five year review'...since 2006....where the stock IPOed at $1.00.....come on!

Yeah, they either have low expectations for their investments over the next year or they really, really, really don't want another failed warrant round.

[Sideshow Bob]

I disagree. Earlier this year the last warrant round was priced at $.83. It was a fail. The next warrant round looks to be executed at approx $.63 in one years time!. This is hardly aspirational for the share price. Has the Board no ambition for the share price?. What message does this send?
Maybe it's time for the board to REALLY consider a change in investment manager after relentlessly reappointing Fisher at each and every 'five year review'...since 2006....where the stock IPOed at $1.00.....come on!

Agree with sentiments. Probably unambitious as want them exercised and some more money back in the tin.......also probably looking at the wider macro-environment.

[Sideshow Bob]

Record date for warrants today, allotment tomorrow, trading expected to start Friday.....

[Sideshow Bob]

Trading underway this morning - currently $0.010.

BRMWH

[waikare]

Trading underway this morning - currently $0.010.

BRMWH

Closed today at $0.003

[777]

Closed today at $0.003

Actually 10 times that at .03.