CNU - Chorus

[Major von Tempsky]

Gravity will eventually win.

The gravitational pull of gross dividend yields consistently and long term much higher than bank deposit interest rates and unreliable finance companies deposit rates which have no capital gain. And backed by Government financing and guarantees and assistance.

Interesting tussle developing between the new cable, Chinese financed and part owned, between Australia and NZ, and the Southern Cross owners who have already slashed rates to render the return from this new cable rather less economic if indeed it is still positive.

[sharer]

Gravity will eventually win.

..
Interesting tussle developing between the new cable, Chinese financed and part owned, between Australia and NZ, and the Southern Cross owners who have already slashed rates to render the return from this new cable rather less economic if indeed it is still positive.

BTW, did TEL retain part ownership of Southern Cross (rather than Chorus)?

[Jim]

I think Telecom still own Southern Cross Cable as well as the mobile network

[buns]

Actually Vodafone dominate Auckland and Wellington is a mixed bag with average mobile data, and a range of fixed line suppliers mainly Telstra taking market share.

Mobile termination is heavily regulated, and killed telecom of late as it let in 2 degrees and abolished all of Telecom's prepay EBITDA.

As a result of LLU and regulation in general the only winners with Telco's these days are consumers. We demand newer and better products ($billions of capex) and don't want to pay much for it (less EBITDA) and don't want to be contracted (no switching costs).

[Major von Tempsky]

Néanmoins, il me parait que la gravité commence a gagner!

Nevertheless it seems that gravity is starting to win! :-) Look at the scoreboard! Look at the scoreboard!

Hey... a number of those comments above just don't apply to CNU....it seems that a number of punters still haven't got their heads around the difference between CNU and TEL.
(nor do they particularly apply to TEL, 2 degs has made greater inroads into Vodafone than TEL).

[blockhead]

When are announcements due for CNU regards half year, full year etc ?

[Major von Tempsky]

Hmmm, hoom, bit of a guessing game as CNU is so new.

But going by TEL there will be an announcement about 3 to 4 weeks before the first dividend is due for payment in June, presumably early June.
Last year TEL made an announcement on 6 May so that could be an interesting date. And again 19 November for the following dividend.

And for Tel I suppose 11 Feb adjusted to the nearest Friday, Tel usually only likes making dividend announcements and payments on Fridays, for Tel's next announcement.
That makes it 10th Feb or 17th Feb.

[Major von Tempsky]

Going alright today - up 7 cps so far.

You wonder why some people (morons?) were so keen to sell out at $3.21 recently....

[BIRMANBOY]

My broker called me today and said Chorus has $4 written all over it. I've added again to my holding that I bought in early Jan, given the yield it's a great stock to hold. Nice to see it back to its original listing price.

It hasnt had a dividend yet so how do you know the yield?

[Major von Tempsky]

Aha! You mean you haven't read the 2 kgs/4.5lbs, 1.25inches thick, 525 pages "Share in Two Journeys" demerger document from cover to cover yet?

Shame! Shame!

May I refer you to page 25 of said tome where it states, inter alia, "it is anticipated that for FY12 ....a dividend policy to payout 25 cents per share".

And again, p136 (are you still with me?)

"...the payout will be pro-rated to reflect only the post-Demerger period" i.e. 1/11/2011 to 30/06/2012 inclusive. On page 25 it mentions that results will be declared in August 2012. It also mentions (both pages) that Chorus will start with a nil balance in its imputation account thus "Dividends paid are expected to be imputed to the extent possible".

The Non Executive Director Prue Flacks (p103) and the General Manager Human Resources Sara Broadhurst (p105) are not bad looking birds.

Any more questions?

[macduffy]

Fair enough.

That's a forecast yield - and we all know about forecasts!

;)

Judging a book by its cover isn't a great policy


The Non Executive Director Prue Flacks (p103) and the General Manager Human Resources Sara Broadhurst (p105) are not bad looking birds.



although I must admit I hold a few CNU's.

[BIRMANBOY]

Aha! You mean you haven't read the 2 kgs/4.5lbs, 1.25inches thick, 525 pages "Share in Two Journeys" demerger document from cover to cover yet?

Shame! Shame!

May I refer you to page 25 of said tome where it states, inter alia, "it is anticipated that for FY12 ....a dividend policy to payout 25 cents per share".

And again, p136 (are you still with me?)

"...the payout will be pro-rated to reflect only the post-Demerger period" i.e. 1/11/2011 to 30/06/2012 inclusive. On page 25 it mentions that results will be declared in August 2012. It also mentions (both pages) that Chorus will start with a nil balance in its imputation account thus "Dividends paid are expected to be imputed to the extent possible".

The Non Executive Director Prue Flacks (p103) and the General Manager Human Resources Sara Broadhurst (p105) are not bad looking birds.

Any more questions?

Thanks for that...so I will be hoping that the anticipated estimation of the wished for yield will be included as a necessary portion of the annual reports. That will be in the sub-section entitled "If you didnt enjoy reading about how much money we spent on needless expenses...please take a look at our tea-leaves and crystal ball chapter". Make sure we give everyone a "feel good" moment. See below for further other "anticipate" references. :"some are slightly embellished for the sake of artistic license"
"I estimate that we should be out of Vietnam in six months" Henry Kissinger.
"Afghanistan will be a piece of cake" everybody from genghis Khan on.
"I should be finished painting the house by the end of the week" ditto.
..But I will be looking forward to the dividend now.....hope it comes to pass.

"

[Major von Tempsky]

On a yield of 8% PLUS imputation credits :-)

[Major von Tempsky]

$3.50 per CNU share now :-)

[Major von Tempsky]

Quick! Just before CNU falls off the leaderboard to page 2 - Chorus reaches 363!

Reminds me of 1967 when I was a student at Vic.
Three weeks after the end of the 6 Day War, which everyone had been following very intently, the student newspaper Sentinel, ran a small story at the bottom of the front page.
"Leading elements of the Israeli army, escorted by tanks, today reached Peking. Blah blah blah."
I just about rolled out of my chair at the caff laughing. Brilliant spoof.

[troyvdh]

...dear sparky...thats great....did you ask how many he had....and ...did he offer any other juicy news....

[Major von Tempsky]

Actually, the most satisfying reply is to say nothing at all, but to allow yourself a small private grin with your brandy lime and soda when the price reaches $4.00 :-).

[Major von Tempsky]

Hard to follow the psychology, mentality, objectives of CNU traders.

First they take it up to 370 on the way to 400, now they take it down to near 350.

Do they hope to induce a panic and buy cheaply? Can't really see any sort of panic developing in the context of government guarantees and rewards for meeting targets that are reasonably easy.

Are they geared to hell so that a drop from 369 to 352 is really a worthwhile reward for shorting?

Are they morons? Or suffering from schizophrenia/bi-polar disease?

[blockhead]

Logic is not a thought that springs to mind MVT !!

[Silverlight]

Hard to follow the psychology, mentality, objectives of CNU traders.


CNU & TEL are both fairly liquid so offer overseas funds, that are mandated to hold NZ equities, the ease of getting in and out in large volumes.

They also have the added bonus of allowing fund mangers who are not mandated to speculate in currencies, take a view on the currency by holding TEL or CNU. The loss in the stock can be offset by the gain in their local currency.

[Major von Tempsky]

True, true, the thought occurred to me also. So, when the NZ $ rises they take profits but don't affect TEL so much because of the buyback.

Other thought that occurred to me - all the brouhaha about Sam Morgan's Pacific Fibre cable possibly in two years time - are punters thinking that may impact CNU? Presumably TEL put it's half share of Southern Cross into CNU...

Doubt if Pacific Fibre will be a big money spinner for Sam - for a start the Commerce Commission will by eyeing it like a circling vulture as it does all telecoms in NZ and presumably Southern Cross will price competitively and add to its capacity leaving Sam lamenting. And who knows where it will be in two years, it may not fly yet.

[Silverlight]

Southern cross sits with TEL.

If you picked CNU up at $3, selling at $3.50 is equivalent of 2 years of dividends, especially if they are not imputed in year 1.

Most Chorus holders will be after yield, so its an easy switch to another yield holding, $3.70 looked giddy, and $4 is move your holding to cash territory.

$3.30 looks about right with no impuation.

[sharer]

...
Other thought that occurred to me - all the brouhaha about Sam Morgan's Pacific Fibre cable possibly in two years time - are punters thinking that may impact CNU? Presumably TEL put it's half share of Southern Cross into CNU...


In the split TEL actually kept the SC Cable (i think).
Another problematic fact for the new cable proposed is
that TEL as well as several major users of SCC have repeatedly
pointed out there actually is no market shortage, there is lots of
spare unused capacity. Furthermore the actual SCC charges are
well within market limits - nobody is getting overcharged at all.
Also TEL/SCC consortium have several times significantly reduced
SCC tarrifs in recent years. At the same time there has been significant
investment in improving SCC & its servicing technology. All of which is
quite contrary to the lazy journalism of NZ newspapers who just seem to
have been parroting propaganda from the TEL-haters.
So how good is the business argument for the new cable? why have several
big customers signed up to use it? I want to learn a lot more about it before
seriously considering investing in a future ipo for the new cable.
At that time we will also be very interested in whatever TEL will be doing, but
we can be sure it will be a very competitive response.
Conceivably, TEL might even have found reasons to welcome a new competing cable.

[buns]

Conceivably, TEL might even have found reasons to welcome a new competing cable.

No way - that’s like Telecom welcoming unbundling..

Pac Fibre is bad news for Telecom, the way the make the business case work is by lifting the bandwidth and charging lower prices. SX will eventually struggle to compete as it hits the bandwidth thresholds. Is at this level where Pac Fibre will probably hold their price.

SX has been on the down trend for a few years now, and could be forgotten completely at some point in time.

About a $50-80m hit to EBITDA.

[Major von Tempsky]

http://www.nbr.co.nz/article/southern-cross-cable-slashes-rates-%E2%80%93-don%E2%80%99t-hold-your-breath-cheaper-broadband-ck-107901

This, from the NBR today, is rather more optimistic (and disagrees with Buns, but hey I'm not looking for an argument :-) )
They also announced a 44% price cut which rather undermines the economic rationale for Pacific Fibre. Good to see someone fighting back rather than just lying back and allowing themselves to get trampled over.

......"Southern Cross announced a capacity boost, and plans for a 100 gigabit/sec upgrade by December (that’s a very, very, very fast speed – but also academic, given your ISP will only buy a small slice of capacity, largely dictated by price).

As ever, there’s no doubt, on a technical level, that Southern Cross can carry all the broadband data that New Zealand internet users can throw at it – and likely continue to as the Ultrafast Broadband (UFB) roll-out brings faster fibre connections to homes and businesses over the next decade. The key benefit of the Pacific Fibre (Sydney-Auckland-LA) and Axin/Huawei cables (Sydney-Auckland) will be to provide more price competition.
"
If they go ahead in two years time.... ;-)

[Major von Tempsky]

Why the continuing weakness in Chorus? Anyone have any ideas?

Does it go on to the 1st report in August and then everyone snaps awake?

[karen1]

As the man says, unhelpful: http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10800084

[Major von Tempsky]

Ouch!

This cuts right across what the Government was trying to achieve both with the UFB and the partial floats of Government Corporations.

Expect the heavy boot of Government to go STAMP! on the extended fingers of the Commerce Commission at some stage :-)

[karen1]

In the NBR today: http://www.nbr.co.nz/article/amp-capital-cleared-skirt-kiwi-share-lift-chorus-stake-15-wb-117794

[karen1]

Initial thoughts were to expect a sp rise this am, so far, so good.

[Major von Tempsky]

Does ComCom know what it's doing? But ComCom foreshadows a changes in the Telecommunications Act - which I think will be ComCom's turn to get a nasty surprise as the Government uses it to sort ComCom and enforce its plans for UFB vs copper.

GENERAL: CNU: Draft Decision on UCLL Pricing Release by Commission 08:43a.m.

CNU
04/05/2012 08:43
GENERAL

REL: 0843 HRS Chorus Limited (NS)

GENERAL: CNU: Draft Decision on UCLL Pricing Release by Commission

STOCK EXCHANGE ANNOUNCEMENT

4 May 2012

Draft decision on UCLL pricing released by Commerce Commission

The Commerce Commission has issued a draft decision on UCLL re-benchmarking.

The Commission's draft decision proposes a new price for UCLL services. This
would impact around 6% of Chorus' copper-based access services on today's
volumes.

The draft UCLL price is no longer an exact average of the existing urban and
non-urban UCLL prices.

The draft decision foreshadows that there will be further Commission
processes. This includes an investigation into a potential change to the
Telecommunications Act for how the price of UCLFS services will be
calculated. The implications for the pricing of the other Chorus services
referred to the Commission's draft decision (SLU, UCLFS) is unclear. Chorus
is disappointed that this creates uncertainty for investors and industry.

At a time when New Zealand is making a very significant investment in
building a fibre world, Chorus is concerned that the Commission's draft
decision creates a potential disincentive for retail service providers and
end customers to transition to fibre services.

This is a complex draft decision and we are continuing to analyse it. Chorus
will engage with the Commission on this issue through the submission,
cross-submission and conference processes before the Commission issues a
final decision in mid-August.

A copy of the Commission's media release is attached.

Investor teleconference

An investor teleconference to discuss today's announcement will be held today
at 12:30pm NZ time (10:30am Australian EST). Please dial into the
teleconference 5 minutes before the scheduled start.

Please have the Conference ID ready to quote to the operator when dialling
in: Conference ID: 77975707

To join the teleconference, please use the following dial in numbers:

Country Date Time Dial in
New Zealand 4/05/2012 12:30pm 083035
Australia 4/05/2012 10:30am AEST 1800 007 094
USA 3/05/2012 8:30pm EDT 1800 651 8618
Hong Kong 4/05/2012 8:30am HKT 800 966 885
Singapore 4/05/2012 8:30am SGT 800 641 1152
Japan 4/05/2012 9:30am JST 00531 64 0081
UK 4/05/2012 1:30am GMT 0800 032 3241

*To join the teleconference via International Direct Dial from other
countries, please dial your country's international access code followed by
+64 83 08 30 35

An audio recording of that briefing will also be made available on the
investor centre section of Chorus' website afterwards.

ENDS
For further information:

Melanie Marshall
Head of Communications & Brand
Mobile: +64 (27) 452 6231
Email: melanie.marshall@chorus.co.nz

Brett Jackson









© Direct Broking Limited 2005.

[Major von Tempsky]

National now has a problem it will have to address: after the shabby treatment meted out to first Telecom and now Chorus by successive governments and ComCom it's going to be a very sceptical investing public eyeing the 5 floats National is so desperate to get away to please the IMF and help the Budget.

I was interested in getting a slice of Mighty River but I'm not now, I wouldn't touch it with a 40 foot barge pole and I predict neither will other investors including overseas ones until the Government fixes the Chorus ComCom problem and future ComCom problems in advance for the power companies.

The floats are going to go down like lead balloons. The Labour Party can relax.

[macduffy]

National now has a problem it will have to address:

I think you're right there, Major.

But I don't see the SOE partial floats going down like lead balloons. Those partial privatisations are too important to the ongoing success of the govt to be allowed to fail, so I see pressure being brought on the CC - which will also benefit CNU down the track.

Time to look seriously again at CNU, IMO.

[Hoop]

Com Com's timing was to pure perfection ....the very same day that the NZ$ did a TA break...If I was an overseas investor in NZ equities (aka CNU, TEL) I'd be ditching too. FBU has already been mostly ditched...
Is this the start of foreign money leaving NZ and returning home?

[Silverlight]

If we get back to $3 its good buying, above $3.60 was looking too rich, long term Chorus still has a monopoly and is being paid to build the UFB and has an excellent mgmt team.

The idea that mighty river won't do well is a misnomer as Chorus is not 50% owned by the government therefore they don't have a direct implication that the comcom is hurting an SOE.

[blockhead]

Just what I love, put a whole bundle of cash in a stable share like CNU and the Tories change the rules one day, no wonder people prefer to buy a house and there is no investment in the so called productive sector. I had just been saying to Mrs Blocky we should invest a few hundred thousand in stable shares like TEL and CNU but she was wary, she remembers Equiticorp etc. Phew, saved by Mrs Blocky again !

Well don't ask me to invest in the SOE's, I would rather leave it in the overseas owned banks !

[Major von Tempsky]

David B - the problem is the principle involved.

If ComCom can get away with interfering in the market for copper wire transmission then it can get away with interfering with fibre-optic prices. And then it's a very short step to interfering in electricity price markets against Mighty River, Meridian, Genesis. Naturally after they had been successfully floated à la Telecom.

Beware: Karl Marx and Stalin and Mao Tse Tung are alive and well and living in NZ and working at ComCom.

The market has now learned a very bitter lesson: Don't touch any share in NZ which could possibly be attacked by ComCom and never trust Government share-floats. They're poison.

[blockhead]

Hi Sparky, I didn't mean to liken Chorus to Equiticorp, what I was trying to emphasise is there are still a lot of people wary of the sharemarket as a place to put hard earned savings because they remember it as a place where a huge amount of money was lost in the '87 crash. Mrs Blockhead has a long memory and still thinks it is a dodgy place to put the hard earn't, such decisions as we saw last week just keep reinforcing her thoughts.

[troyvdh]

I think that you and Mrs Blockhead are exactly right.
What folk continue to fail to realise is that for institutions like the share market to thrive ...it requires credibility....again I will state that as long as incidents (like Ms Gatting telling politcians behind closed doors that should they adopt a particular policy then the SP of TEL would collapse thereby effecting shareholders and institutions adversly) and the abovecontinue there is little hope.

And yet ..."experts"....Like Martin Hawes (Sunday times) continue to chide and ridicule residential investors (like me 30 + years) who continue to enjoy satisfactory returns and considerable comfort !!!!!!.It aint that flash....but its good enough !

[BIRMANBOY]

I think that you and Mrs Blockhead are exactly right.
What folk continue to fail to realise is that for institutions like the share market to thrive ...it requires credibility....again I will state that as long as incidents (like Ms Gatting telling politcians behind closed doors that should they adopt a particular policy then the SP of TEL would collapse thereby effecting shareholders and institutions adversly) and the abovecontinue there is little hope.


And yet ..."experts"....Like Martin Hawes (Sunday times) continue to chide and ridicule residential investors (like me 30 + years) who continue to enjoy satisfactory returns and considerable comfort !!!!!!.It aint that flash....but its good enough !

As the aussies say, harden the f**k up! :-) Come on.. the share price is not guaranteed....as someone said it goes up and it goes down. I'd rather have shares than deal with bad tenants, continual maintenance, rent tribunals, bad tenants (again)! and all of my money tied up in something I cant sell quickly if I need to. Up to the individual how they invest of course but if you are smart and diversify your share portfolio you will probably be up someplace and down somewhere else. So what if something goes down...history will show that a majority of sound companies recover over a period of time and if you are patient the "downs" are great to pick up more shares at a good price. I feel sure I will be buying some more CNU soon.

[Animeart]

Let's all vote with our feet and make sure that Mr JK doesn't get re-elected....LOL.

[troyvdh]

....dear birm....I do divesify.....over 30 yrs....have had 3-4 bad tenants.....regarding the need to harden the F... up......same could be said to those folk who struggle to find good tenants/keep them and to look after the occassional bad egg.....cheers

[BIRMANBOY]

[QUOTE=SparkyTheClown;373609]@Birmanboy - the market has clearly not expected how hard the ComCom would regulate Chorus. Yes, today might represent a nice entry point should the govt step in and scale back the amount of regulation for the rebenchmarking of prices. It might also languish here at this price point for 2 years because institutions sell out and people don't believe that Chorus will be allowed to grow to take advantage of its position.

Ifs, ands, mights and maybes...pigs might fly too. Why on earth would you believe that? Your fears are irrational and unlikely to occur. Why would the powers to be want to stifle the vehicle that they have given birth to? People who react to every slight nuance in the share market price need to relax and not try and "understand" every twist and turn. Some of the theories that get thrown in as being the "cause" are derived from over caffeined imaginations and idle minds. My suggestion...be patient and relax..all will be revealed in due course.

[karen1]

What's eating you, Birmanboy? Haven't particularly followed your posts, but a couple of yours above are a bit sharp! The Aussies are known to have many other quotes than the one you used. I always enjoy reading a good, clean post. Sparky makes some valid points, as a relative newcomer he/she appears to be a valuable addition to ST, with some very well thought out posts.

Back on topic, no amount of speculation here, even educated, is going to change the fact that Comcom has erred in the extreme - and it remains to be seen if it will be reined in.

[BIRMANBOY]

What's eating you, Birmanboy? Haven't particularly followed your posts, but a couple of yours above are a bit sharp! The Aussies are known to have many other quotes than the one you used. I always enjoy reading a good, clean post. Sparky makes some valid points, as a relative newcomer he/she appears to be a valuable addition to ST, with some very well thought out posts.

Back on topic, no amount of speculation here, even educated, is going to change the fact that Comcom has erred in the extreme - and it remains to be seen if it will be reined in.

I'm sure Sparky is a wonderful human being..he/she obviously enjoys entertaining people at Xmas parties etc. As for who has 'erred in the extreme"...well personally I would trust the Commerce Commission to have greater access to pertinant information than any of the posters here. As I said these things get sorted eventually and nothing much to worry about in the long term. Agree about the speculation...far too much of it...by us mostly!

[karen1]

Have just been reading a 4th May ASB recommendation (Morningstar) on CNU, with accumulate and target of $4.00. "•We do not expect significant financial impact (comcom announcement) in the short term but the negative draft decision presents longer term uncertainty.

•There is no change to our estimates and fair value."

[BIRMANBOY]

Have just been reading a 4th May ASB recommendation (Morningstar) on CNU, with accumulate and target of $4.00. "•We do not expect significant financial impact (comcom announcement) in the short term but the negative draft decision presents longer term uncertainty.

•There is no change to our estimates and fair value."

Agree...uncertainty yes...slitting ones wrists...no.

[BIRMANBOY]

Ixnay on the condescenday, BirmanBoy.

The Commerce Commission's involvement will send a big signal to institutional investors, not just in Chorus, but or any NZ infrastructure company. Not just the listed ones, but the ones yet to be listed (IE, govt SOE floats). I agree with others that there is going to be a tough sell for these SOE floats if investors think the Commerce Commission can act in an uncertain and surprising way.

This is the Commerce Commission mission statement from their website.
About UsThe Commerce Commission is New Zealand's primary competition regulatory agency.


We enforce legislation that promotes competition in New Zealand markets and prohibits misleading and deceptive conduct by traders. The Commission also enforces a number of pieces of legislation that, through regulation, aim to provide the benefits of competition in markets where effective competition does not exist. This includes in the telecommunications, dairy, electricity, gas pipelines and airport sectors.
The Commission is an independent Crown entity established under section 8 of the Commerce Act 1986.The Commission is not subject to direction from the government in carrying out its enforcement and regulatory control activities. The Commerce Commission’s purpose is to achieve the best possible outcomes in competitive and regulated markets for the long-term benefit of New Zealanders. END STATEMENT

Now I take some comfort in this as should the knockers. They are NOT subject to direction from GOVT. and are set up to provide as level a playing field as possible. I have faith that whatever gets decided in the laborious system of meetings, submissions and more meetings will not be "uncertain and surprising". Every interested party will have their 2 cents worth and Chorus will put their view forward as well. What comes out the other end is hardly likely to be surprising to institutionals who have legions of lawyers and suits examining the entrails of these things. Personally I am happy that we have an entity like the Commerce Commission doing what they do. Chorus is big and ugly enough to take care of themselves and will have contingency plans set up to take care of these things. Time has a way of evening out the bumps and Chorus has already shown a good recovery today.

[Major von Tempsky]

I certainly don't " take comfort" from their statement, in fact it sends chills up and down my spine. Here is an organisation which is, at least temporarily, out of control of the democratically elected government. There are no checks and balances. Naturally they only employ people with a predilection for Socialist intervention and sympathies for a command economy (Wolfgang Rosenberg revived), a Dr Sutch siege economy.

It says you start a successful company making and selling goods and/or services and we will step in arbitrarily and abruptly and in effect confiscate the shareholders shares, including those on family farms and family businesses who are just making a living.

Think about it, its one of the most dangerous organisations in NZ.

[BIRMANBOY]

I certainly don't " take comfort" from their statement, in fact it sends chills up and down my spine. Here is an organisation which is, at least temporarily, out of control of the democratically elected government. There are no checks and balances. Naturally they only employ people with a predilection for Socialist intervention and sympathies for a command economy (Wolfgang Rosenberg revived), a Dr Sutch siege economy.

It says you start a successful company making and selling goods and/or services and we will step in arbitrarily and abruptly and in effect confiscate the shareholders shares, including those on family farms and family businesses who are just making a living.

Think about it, its one of the most dangerous organisations in NZ.

Ok...thought about it and would suggest that delusional paranoia is much more dangerous than the Commerce Commission. They are supposed to be out of the control of the Govt for a start. Read their statement again carefully...this is so far from your comments that its hard to see any connection.

[Major von Tempsky]

Nope, can't see any reason whatsoever Burma Boy to revise my statement. I would suggest you are at variance with the facts and ComCom and NZ history. In fact I'd be surprised if you even knew who Wolfgang Rosenberg and Dr Sutch were.

On a different less boring tack I see a new statement released by CNU that AMP has increased its stake from 34 mill shares to 39 mill shares, bit over 10% of their share capital - their analysts must have some idea of an appeal by CNU with some likelihood of success hein?

[sharer]

Well, i did the same as DavidB, & for similar reasons. Thanks to others for their comments too.
There have been statements that the new ruling might reduce CNU revenue by about $25m/yr,
which would be reason for some nervousness, if it is true.
Especially as we don't yet know what the div yield will actually be, despite common assumptions.
So i'm standing ready to dump the extra shares if necessary ... but the recent AMP move does strengthen resolve to hold somewhat.
A late rush led to close @ 316, seems likely to open about 315 tomorrow.

[karen1]

A broker perspective http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10804712

[craic]

Had you sold 1000 CNU shares when they came on the market, you wold have recovered $3,200 and had you invested that in TEL at 200cps you would have 1600 TEL shares worth $4,240 on yesterdays price.

[blockhead]

Now how would a broker be able to quantify this statement ?? Unless I have missed something we have no idea what div CNU will pay

Forsyth Barr broker David Price said the market did well in comparison to Australia, who just limped in to positive territory today. The S&P/Australian 200 Index rose 9.5 points or 0.22 per cent to 4310.88.

"The main game continues to be Chorus. The stock offers an attractive yield albeit with less clarity than before."

[BIRMANBOY]

Had you sold 1000 CNU shares when they came on the market, you wold have recovered $3,200 and had you invested that in TEL at 200cps you would have 1600 TEL shares worth $4,240 on yesterdays price.
Bugger, the Delorean is in the garage..I'll have to wait until they replace the spindlle reciprocator filter on the year selector mechanism.

[craic]

Wasn't it Warren Buffet who said that he never buys into IPO's? He waits to see what the company can deliver. I would hate to think of CNU becoming another Wellington Drive Technology.

[CJ]

Wasn't it Warren Buffet who said that he never buys into IPO's? He waits to see what the company can deliver. I would hate to think of CNU becoming another Wellington Drive Technology.As a regulated monopoly, CNU should be allowed to return a sufficient return on equity. Therefore it will be no WDT. Whether that return justifies the current share price is another question but there is no doubt that CNU will be profit and will pay a dividend.

Vector would be the closest comparison as the majority of its business is a regulated monopoly.

[macduffy]

Shareholders in CNU - and TEL - will be interested in Brian Gaynor's excellent article this morning, tracing the history of the Government/Commerce Commission's "influence" on these companies. Pretty much why I continue to treat these two and the proposed SOE partial privatisations will a high degree of caution.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10805262

[The BOWMAN]

Can anyone do a bit of explaining why CNU is seen as a divi yield stock? They are spending lots of money on fibre roll out for the next couple of years or more. In the meantime the income stream is not going to catch up. So it seems that they will be in an investment mode for quite a while. Where will the surplus profit come from? What do you think their divi yield will be?

[bung5]

would of thought that the divys come from the copper network and the billion doller investment roll out is going to be interest free loans from the goverment

[Silverlight]

Can anyone do a bit of explaining why CNU is seen as a divi yield stock? They are spending lots of money on fibre roll out for the next couple of years or more. In the meantime the income stream is not going to catch up. So it seems that they will be in an investment mode for quite a while. Where will the surplus profit come from? What do you think their divi yield will be?

Looking at the forecasts Chorus will earn around 45 cents this year, and 50 cents next year, they have not announced their dividend policy yet, however a conservative view is for 15 cent divdend this year, and around 25 cents next year. So currently a conservative yield at a touch under 5%, moving to 8% or so next year.

[sharer]

Hi SIlverlight - is that 15c dividend though for a part year/parted company - rather than a full year's dividend? I seem to recall that the dividend for CNU was going to be pro-rata'd to reflect the split from TEL.

I think the TEL pre-split docs indicated a possible 25c/s p.a. div for CNU, & most mkt commentators (& buyers?) seem to have been assuming that would be the case & quote their yield etc statements accordingly.
However the new board of the new company CNU have i think several times made comments that seemed (to me) to mean something like "well, that's what they said, but what actually happens will be decided by us as an independent entity". Which seems to leave it open for them to decide on a maiden div of anything, most likely less than the mooted 25c, & quite possibly zero ( i think unlikely for either business or public relations reasons). As others also pointed out, we don't really know anything until the first accounts are published in the fairly near future.
Which is why i tried to indicate some caution earlier on - though that did not stop my going for a substantial buy-in during the recent price slump. But that was a conscious punt, not validated by anything until the accounts come out. We might have made a big mistake, but i am still hoping this is going to come right as a steady earner, even if it has to be modest for the first few years.

[craic]

So why leave your money in a place wher the return might be "modest for the first few years'? Why not return to the main source TEL?

[sharer]

So why leave your money in a place wher the return might be "modest for the first few years'? Why not return to the main source TEL?

Good question.
I'm just contemplating what might be a good entry price to expand the TEL holding. Another consideration is that one doesn't want too much capital in one basket.
At current yield & p/e TEL has to be favorably considered when allocating new funds.

[macduffy]

Interesting article on the uncertainty which still surrounds who will bear what costs to connect households to fibre.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10809159

[CJ]

Interesting article on the uncertainty which still surrounds who will bear what costs to connect households to fibre.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10809159
I thought it was FTTH (fibre to the Home), not FTTRS (Fibre to the road side). If CHU doesn't pay, alot of people wont connect due to the cost and it wont achieve the effect it wanted (97% of people on fibre).

EG. Landlords and owners in lower decile areas wont pay to have fibre installed so those tenants/residents will miss out on the benefits.

[GTM 3442]

On the Chorus website, it says fibre to the premises.

http://www.chorus.co.nz/ultrafast-broadband

However, they only will build the last few metres when someone signs up. Who pays for the last few metres? That I don't know. Maybe someone wants to write to the Chorus investor relations people?

Sounds not unlike the Saturn rollout in the Hutt about 10-12 years ago. They'd cable the street, and if you signed up at the right time, the connection to (and within) your house was free.

If you signed up at the wrong time, the connection to (and within) your house wasn't free.

Not unlike the Sky "free installation" offers which used to appear from time to time.

[Major von Tempsky]

Seems to be quite a tussle going on between the glass half full and the glass half empty. CNU had the highest turnover on the market today, higher than TEL and higher than Fletch.
The brokers who said $4 aren't resiling from their evaluation and the doubters keep stirring.

Moi, I think I'll sit until the results come out and if they aren't totally convincing I'll get out then.

[blockhead]

Think I will sit on the sidelines with you Major, I sold all my NOG,s (@ 77.5c) a few days before the CNU price dropped, topped up my CNU @ $3.44 and have watched them struggling back up since then, would have been better to have stayed in NOG as it happens but after many many years I have cut the cord.

Still think CNU will get back close to $4 especially if the div represents a similar return as that of TEL.

I have a few quid needing a home but am content to just watch for the time being.

We recently sold our business and I have been working for a few agricultural contactors around Canterbury, man those cow cockies know how to get a few bob tied up in equipment and expenditure !

[sharer]

Once again some speculate: What if TLS.nzx or .asx put in a bid for TEL ??

http://www.stuff.co.nz/business/industries/7026357/Breakup-buzz-in-Reynolds-wake

Apparently TLS expect soon to have a lot of free cashflow & NBN related $$ looking for investment. So what if TLS thought their problems with their NZ network might ameliorate if they bought a nice big chunk of Chorus ??

Even more speculatively, what if one of the other fairly strong Oz telecoms companies took a serious interest in either TEL or CNU ??

[Major von Tempsky]

Excellent article today in The Press, page A14, by "Chalkie" entitled "Commission revs Up Broadband Pricing".Required reading for all CNU holders. Hasn't appeared via Google yet.

Amongst other things the article identies two crucial dates, July 11 and August 10.

Why these dates? The former is when the ComComm chairman Ross Patterson's contract is up for renewal which is now in some doubt for attempted sabotage of the Government's UFB program. A suicide bombing perhaps? He may go the same way as the recently departed ACC chairman. Mark it on your calendar.

August 10? The date CoCom comes out with a final decision on UCLL pricing. Mark that on your calendar too.

[Major von Tempsky]

Thank MvT, but a couple of points:

1) Ross Patterson is not Chairman, though he is up for renewal as commissioner. Mark Berry is chairman.
2) Patterson is already hunting for jobs overseas, according to the Herald around a week ago http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10810825

I have a feeling the govt is taking a greater interest in how the ComCom impacts on businesses, which mirrors the concerns you, I and a few others have raised here in the last month or two.

Chalkie's article is online here : http://www.stuff.co.nz/business/opinion/7091580/Commission-revs-up-broadband-pricing


Thank you for that correction Sparky, Commissioner then. Let's hope that dear Ross finds something suitable overseas, even if at a reduced rate rate of pay with a suitable left wing government....

[Major von Tempsky]

Interesting page 402 on Teletext today.

"New Zealand Infamous for Telco Regulation.

New Zealand is gaining an international reputation for extreme and unpredictable regulation by its competition watchdog, the Commerce Commission, says Andrew Bascand, managing director of fund manager Harbour Asset Development".

(So, I started thinking of suggested countries for Commissioner Ross Patterson to score his next job when he is not re-appointed July 10. How about Argentina, Venezuela, Belarus, Ukraine, Russia?)

[Major von Tempsky]

Hooray! and up she rises, earlie in the morning!

Radio news lunchtime today. Old fashioned socialist Ross Patterson gone from ComCom, replaced by a man with riding instructions to advance UFB!

[blockhead]

Now down to 3.19 in intra-day trading, down 9c today. Very volatile. Anyone know whats happening with CNU today?

TEL not looking very rosy either

[Major von Tempsky]

Trouble is, a lot of investors still consider TEL and CNU together as if they were still one unit, that there hasn't been a demerger and they don't operate in different markets under different conditions. Take a look at the TEL and CNU turnover particularly early in the day when overseas investors dominate - it's usually TEL number 1 by miles and number 3 for CNU after Fletcher showing that the overseas investors have, by and large, held onto their CNU shares after the demerge.

That being the case I think the explanation for CNU is provided by TEL. TEL announced that AMP is no longer a significant holder - you get these announcements all the time, there was a recent one saying Black Rock Investments is now a significant holder, and all the weak holders dived for cover. Either that or its another proxy play on the NZ dollar again, speculating in TEL is a good way of speculating in the NZ dollar. I guess the $ is up so overseizure is taking profits.NZ

[Major von Tempsky]

NZ dollar goes down yesterday, TEL and CNU share prices go up. Prior to that NZ dollar goes up and TEL and CNU share prices go down. Add in good doses of extra leverage to exaggerate the movements and you're there.

Magic. Voodoo.

Pity all the currency speculators can't just b****r off and leave these shares to NZ investors and fundamental analysis.

[Major von Tempsky]

I'm happy to wait until Aug 27th to get a real steer on things :-)

No need to ask what the NZ dollar's done today, just look at the TEL and CNU shareprices.

Unfortunately the NZ$ is the 10th most traded international currency - I guess because we have about the cleanest float out....

[sharer]

Radio news tonight reports the three main wealthy promoters for the new transoceanic cable have now abandoned the scheme. Apparently they could raise only about half the money needed.
This seems to validate the earlier critiques.
Hope somebody at Chorus will notice, & have a good think.

[Major von Tempsky]

Interesting graph of US/NZ dollar and CNU price Sparky (until Hoop/Phaedrus get hold of it ;-)). Do you have an Internet ref for it so I can read the accompanying article?

Belge, there is stuff posted higher up this thread and prob the TEL thread too pointing out that Southern Cross has huge unused capacity to serve NZ's future needs without Sam Morgan's unneeded intervention.
I'll repost it if people can't find it.

Banana republic? You must have missed one of the major credit rating agencies reaffirming NZ's credit rating yesterday.
If you add NZ's kiwi dollar currency appreciation to the economic growth since National came to power you'll find a noticeable lift above the banana republic status under Labour.....

[Major von Tempsky]

Yep, I did note that date (and the date at which Ross Patterson's tenure cam up for renewal) in an earlier post.

12 days to go :-)

So far 1 out of 3 - Ross Patterson blown away, Aug 17 and Aug 24 to go.
I do remember some encouraging words in the media about Patterson's replacement being more even handed between investors and consumers so I'll march on with fingers crossed.
Otherwise the government and scribes will be wondering why NZ investors do nearly all their investment overseas and why the NZX has declined to the point of disappearing.
You'll note that most new NZ companies seem to prefer to float on overseas exchanges....but Labour supporters don't notice stuff like that....

[sharer]

One report said that there's just one cable into and out of NZ. This is wrong. There are more than that.

Exactly how many are there tho? Anyone know? Just how much redundancy is built into NZ's international internet links? ...

I'm no expert Belgarion, but i'm sure someone recently described on radio how the SCC actually has two separate landings on NZ coast, for local redundancy, also very importantly that SCC is a "self healing" network, presumably because of its "figure-of eight" topology (and automatic diversions if one segment faults). There is a major 'hub' in Hawai'i, but i can't recall if that is the only one.

I've now lost most of my old university contacts, so not sure if there are other specialist or scientific links.

Before the recent failed consortium got started, i think Kordia had a plan of their own - i wonder if that might later be revived (if politically convenient & with a little help from your taxes).
Meanwhile, we look forward to learning just what the div yield will be.

[sharer]

In DomPost today an interesting ref to story in Oz Financial Review that sounds like evidence for Key's mob planning to sell off Kordia, maybe quite soon.

[Major von Tempsky]

Excellent! That's two down (Patterson's demise and replacement by someone constructive), today's constructive announcement but now we have 3 further dates to tick off - Friday next week's maiden announcement, Sept 17 next paper, and November's decision. At least it's all going in the right direction now instead of Argentina/Venezuela socialist regulations.

I'm glad I held on (so far) instead of panicking and fleeing like the rest of the mob...

[Major von Tempsky]

Place-holder - so you don't have to go searching for the CNU thread on Monday :-)

Then we shall see how much those who spent so much time totally rubbishing CNU higher up this thread with next to no information actually know :-0.

[blockhead]

Healthy dividend outlook as well

Dividends
Chorus will pay a prorated dividend of 14.6 cents per share
on 5 October 2012 to all holders registered at 5.00pm Friday
21 September 2012. The shares will be quoted on an ex-dividend
basis from 19 September 2012 on the NZSX and 17 September 2012
on the ASX.
The dividends paid will be fully imputed (at a ratio of 28/72) in line
with the corporate income tax rate. In addition, a supplementary
dividend of 2.5765 cents per share will be payable to shareholders
who are not resident in New Zealand.
Chorus expects to pay a fully imputed dividend of 25.5 cents per
share in FY13, subject to there being no material adverse changes
in circumstances or operating outlook. An interim dividend is
expected to be paid in April 2013 and a final dividend is expected
to be paid in October 2013, on an estimated 40/60 split basis,
subject to there being

[Major von Tempsky]

Hey! Hey! Looking pretty good!

By my quick calculation that gives CNU a gross dividend yield of 12.1% for the year!
I'm so pleased I held on to them! :-)

Well up a grudging 22cps so far today - $4 here we come!

[Major von Tempsky]

Belge darling,

Nothing can detract from the fact that I love you dearly, I am absolutely besotted with you, I adore you - and you do also.

[blockhead]

So, for the sellers of FPA, once they get over the rosy glow, where will they park their coin, which looks most attractive pre div ? TEL or CNU ?

[Silverlight]

HNZ & PGW & PPL ... all who haven't paid a divie for yonks and will soon ... and can be bought at a cpaital discount because they haven't paid a divie for yonks :)

Add Cavalier to that list Belg :)

[macduffy]

CNU "unable to provide longer term dividend guidance".

http://www.stuff.co.nz/business/industries/7712898/Chorus-repeats-payment-warning?cid=edm:businessday:dailybrief

[craic]

Spoke with a guy who is an expert in this side of CNU and he tells me that the take-up of the fibre option is way below the level needed to make it anywhere like profitable. While the capital cost may be covered by the Govt, the ongoing cost is to the consumer and there are nowhere near enough of them.

[POSSUM THE CAT]

Sparky The Clown even getting fibre to the house is I think only half the problem. I take it you then have to pay to rewire the house even if it is practical to do. Your answers to this would be appreciated TIA.

[andysh]

PTC, I don't believe the house needs to be rewired as such. A new termination point goes to the house and this goes to a new router / modem with has fibre going into it. This then goes to the computers and phone. Guessing the phone is a VOIP sort of thing (such as Orcon Genius)

Just going on reasonable guesses here.

Also there is a good write up about a install if you want: http://www.geekzone.co.nz/forums.asp?ForumId=65&TopicId=105730

P.s. first post.. long time reader.

[POSSUM THE CAT]

ANDYSH so you are suggesting A wireless hot point and all phones will then have to be Wireless. This will still be expensive.

[andysh]

Hope not, there must be a way to use the existing wiring for the phone line but think it will again have to go through the router / modem as it looks like phones will be using data (VOIP). Again this is just guessing and by no way am an expert.

E.g. fibre come to router, router then has a POTS port (plain old telephone system) which then links into the existing wiring for telephone around the house.

[Major von Tempsky]

Waal, for those who had completely lost sight of it....amidst the usual interminable bureaucratic delays...which stretch the timetable out and out...today is scheduled as the 5th and last of the 5 important first steps for Chorus. See page AP of today's Press "Chorus = Price cut to phone lines expected".et seq. And higher up this thread for the other 4 steps.

Look for (a) whether the average price of access to unbundled phone lines is cut to $19.75 a month (bad) or only to $22.75 a month (good).
(b) any changes in the attitude of Stephen Gale vs alky left winger Ross Patterson.

Will the Government allow its plans for wide and early ultrafast broadband access to be derailed by unelected leftish tending bureaucrats?

[Major von Tempsky]

Waal, for those who had completely lost sight of it....amidst the usual interminable bureaucratic delays...which stretch the timetable out and out...today is scheduled as the 5th and last of the 5 important first steps for Chorus. See page A9 of today's Press "Chorus - Price cut to phone lines expected",et seq. And higher up this thread for the other 4 steps.

Look for (a) whether the average price of access to unbundled phone lines is cut to $19.75 a month (bad) or only to $22.75 a month (good).
(b) any changes in the attitude of Stephen Gale vs alky left winger Ross Patterson.

Will the Government allow its plans for wide and early ultrafast broadband access to be derailed by unelected leftish tending bureaucrats?

[Major von Tempsky]

Oh! très drôle....decision postponed (see bureaucratic delays) until June next year.
Does this mean that Chorus can keep charging at $24.75 a month until them?

If so its not such a bad decision....

[Major von Tempsky]

Ha ha ha! See the last sale for CNU this morning? Down 42cps at $2.98! Looks like Stephen Gale is even worse than Ross Patterson.
Well, this will be an interesting test of the calibre of this National Government...will it tamely allow itself to be gratuitously thwarted or will it take a stand to declare itself as investor friendly?
And upon its action or inaction will rest the success or failure of the Mighty River Power float....and the enthusiasm or lack of it at the next election....

[sideline]

Oh! très drôle....decision postponed (see bureaucratic delays) until June next year.
Does this mean that Chorus can keep charging at $24.75 a month until them?

If so its not such a bad decision....

from comcom site:

....
The Commerce Commission has today released its final decision on the wholesale price for access to Chorus’ unbundled copper local loop (UCLL).

The new geographically averaged price is $23.52 per month per line and comes into effect on 1 December 2014. This change equates to a 3.85% reduction on the prices set in 2007, which geographically averaged is $24.46.

Updated urban and non-urban UCLL monthly rental prices of $19.08 and $35.20 respectively have also been set. The updated urban and non-urban prices come into effect immediately.
....

[craic]

Chorus is in big trouble digging up the town here in Napier. Headlines in the paper reports 250 incidents of damage to other underground service since they began including burst water mains and the like. The Mayor is threatening to call a halt and work is suspended in the main Xmas period. A remark, that Chorus have full responsibility for and work to repair damages, does not bode well for their bottom line when they crunch the numbers. I assume that other places have the same problems? Refer tonights DailyTelegraph - front page.

[macduffy]

Looks like panic selling, but its still a bloody disgrace to this country that the regulator can destroy so much investor wealth.

MvT is right, the government should be looked at very closely to see how it will respond.

I wouldn't expect the govt to mount a rescue mission for CNU though. There is a well established precedent for disregard for shareholders' interests when the "public good" is seen to be endangered, eg recent moves against Vector or, more relevantly, Telecom's past treatment. The message is loud and clear - we invest in "regulation prone" companies at our own risk.

Disc: Holding VCT, CNU and TEL.

:(

[Xerof]

http://www.nbr.co.nz/article/chorus-pricing-decision-very-problematic-says-key-bd-133405

keep calm and carry on, the cavalry's coming

[troyvdh]

....woof woof.....gnarl....gnarl......woof..woof........... ......sniff......snore.....sniff.................. ...............................

[Major von Tempsky]

(you've done that one already Troy VD, when someone was silly enough to ask you what you really meant and got a whole heap of silly anti-TEL propaganda. Go away and play nursey games somewhere and stop trying to derail the discussion.)

In fact it's gone further than NBR is suggesting, John Key appeared on TV1 News tonight saying it had an intolerable effect on CNU and government UFB policy and he was in favour of legislating to nullify ComComs determination so I would suggest that ComCom's determination will not come into effect in June, nor will it come into effect in December 2013....nor will it come into effect...

(hey Craic, now you partly know what its like living in Chch ;-) ).

[gv1]

Probably the commission is trying to take from haves to the have nots.......

[binary]

Surely the government has to step in and put a halt to this nonsense. They have invested far too much money in UFB to let the Commerce Commission undermine the entire project. I'll happily pay an extra few dollars for broadband each month in order to progress the New Zealand economy.

However now a 50/50 gamble to make a quick likely 30% profit or loss.

Anybody game?

[Zaphod]

Personally, I am more interested in how the ComCom arrived at this decision. If their pricing determination has been based on facts and impeccable analysis, then so be it; that's what the price should be. If we want to maintain any semblance of credibility, then we should not be manipulating the decisions of a supposed impartial entity.

Overall, If the uptake of fibre is not tracking at planned levels, then address the underlying issues by providing further incentives for early adopters, or reduce international transit costs, or break "big content" deals etc.

[binary]

In all seriousness I think if the price gets to the level in which Chorus has been re-valued to reflect a potential $150 million loss in revenue (Or even $50-100 million) it could be a very good buy.

The further it drops the risk of loss is mitigated and I would think there is a reasonable chance the Government will step in and veto any changes to Chorus charge rates.

Even at worst case scenario in which the ComCom recommendations are implemented, the stock will likely go back to previous levels over the long term (3-5 years) as more New Zealander's move towards UFB.

[Aaron]

being lazy I don't actually do much research but comparing the figures in the pre demerger phonebook and the figures from the 30/6/2012 annual report. The pre demerger report figures I assumed were what Chorus would have looked like without telecom. It's first year operating alone turnover has halved and I guess a "Statement of Changes in invested capital" must be very different to a statement of movement in equity as Chorus's Equity is only $527Mil market value at $3.00 per share is $1,155mil and the demerger document had 30/6/11 "invested capital" at $1,921mil. Turnover is almots half of the figures in the demerger document. can someone explain what the New Chorus special purpose financial statements in the demerger document actually represented.
Mind you based on 2012 eps of 26c we might have a company trading at 10 times LY earnings today. Although $160mil less would have made it an eps loss of 15cents per share.
The 25 cent dividend would be under pressure with these changes. Is the fibre network going to improve things much as customers will only be switching friom the old copper network.What do you think CNU is worth. What about in 2025 when govt investment becomes equity and shares in dividends. I know DYOR.

[The BOWMAN]

Looking at the depth, way too many small investors are trying to catch the falling knife to make a stab of quick profit. While on the selling side the orders are generally larger packages.

[Balance]

Looking at the depth, way too many small investors are trying to catch the falling knife to make a stab of quick profit. While on the selling side the orders are generally larger packages.

Overseas investors getting out, and AMP saying it is getting out.

Look for entry point of around $2.70?

[Hoop]

Good article by Chalkie today (http://www.stuff.co.nz/business/opinion-analysis/8066450/Fibre-price-doublespeak-reveals-policy-fissures)
Steep drop now at 2.72 with no buy signals ....Getting close to your entry point Balance?

[Balance]

Good article by Chalkie today (http://www.stuff.co.nz/business/opinion-analysis/8066450/Fibre-price-doublespeak-reveals-policy-fissures)
Steep drop now at 2.72 with no buy signals ....Getting close to your entry point Balance?

I want to see some big crossings first.

So no, still not yet.

[Balance]

I want to see some big crossings first.

So no, still not yet.

I am in.

$2.70 is where the buck stops.

[Balance]

I see the price is up 2.59% today to $2.77. Just how many are you buying, Balance?

Not enough!

But enough to gain $$$ and buy the kids some lovely pressies this Christmas!

[Balance]

Is that right, Daddy?;):D;)

So far, enuf to buy 'em all the latest Samsung Galaxy 3.

Good enuf?

[Balance]

Actually how far do you think CNU has got to run? Just a bit off these current lows, or do you think this is a real good buying opportunity at historic lows because of the ComCom's actions, and the Govt. will soon sort them out. And the longer term future for the company is looking really bright. So get in now before it's too late???

Overseas funds have been dumping and that's their style.

Creates a short term situation but those of us who live long enough in NZ know that it's too small a country to get too tough on the essential services so the government always act to moderate any excesses, one way or the other.

I see CNU going back to $3.50 over the next 12 months.

[Anonymous]

I don't think CNU are necessarily slow at rolling out UFB or are rolling it out to the wrong suburbs. My big gripe is the lack of options to actually use it. Aside from some of the trial areas I think I live in one of the first suburbs to have UFB completed and it has been available for many months now. As yet though the two larges broadband providers are not offering plans and they tell me it is still some time away. Orcon have offered it to me but want me to sign up to a 12 month plus plan which I refuse to do until I see what prices the competition are offering.

I am desperate to get signed up and move away from the archaic speeds we currently have (which must still be lightning fast compared with most others in the country) and had I known it was going to take so long I would have signed with Ocon in the first place.

We can't call the UFB roll out a failure because of lack of uptake until Telecom and Vodafone actually start offering it.

[Major von Tempsky]

Placeholder - I note the CNU thread has drifted down to page 3 in spite of being one of the most actively traded on NZX.
I also note CNU yesterday indicated that Feb 25th is the date for its next announcement.

What to do with UFB? I'm looking forward to real time TV from around the world. French TV is often very good. In say New Caledonia its almost worth watching all day as they bring in the best from around the world in the different time zones. And their political round tables are very good, you don't get ignorant Paul Holmes types asking stupidly provocative questions that any intelligent and well read viewer already knows the answer to.

[CJ]

What to do with UFB? I'm looking forward to real time TV from around the world. Not going to happen unless you bypass zoning restrictions (I have a US iTunes account and know others who use Proxi serves to pretend they are in the US or UK). SkyTV owns the rights to most of the sport/TV so it cant be streamed from overseas websites.

[noodles]

What to do with UFB? I'm looking forward to real time TV from around the world.

You are making the big assumption that international bandwidth will improve with UFB. Expect to see significant improvement with traffic in NZ, but international traffic won't make much difference (unless you are currently on a very slow DSL connection).

[Major von Tempsky]

What about the recent announcement of 2 improvements to the Southern X cable - won't that improve international bandwidth?

[RazorX]

Man the market loves the news. Up 32 cents so far. (At 12:45)

[blockhead]

Blockhead is happy as well, topped up a while ago @ $2.94

[GR8DAY]

.....yep nice trade $5.5k banked! In at 2.87 out at 3.15. Happy with that......go catch some real fish now.

[Major von Tempsky]

Place-holder for today :-)

[robbo24]

Pretty good report there to start off the week. Better hope that legislation goes their way if you're holding long-term!

Apparently not a good report in the view of the market... Down 3.3%, even with reassurance of a 25.5cps dividend for the full year...

Another big retail sell-down, or are people worried about the additional capital expenditure mentioned in the report?

I would've thought the share price would increase judging by the report...

[Major von Tempsky]

It would be a fool who claimed to know what the future holds for CNU (there are bound to be some such fools around - David whatisname? anyone else?). Even those who will tell you with great certaintly that CNU has got everything going against it - Sparkyabove? have a 50% chance of being wrong, and 50% is unacceptably high for most sharemarket punters...Uncertaintly causes aversion from risk.
But yet - how often when you look back do you say to yourself if only I had bought when the it all seemed so dark and gloomy at the bottom?
If the government rescues them, which it says it will, and they thus sustain and improve their dividends (they say if the gov't does the right thing then their second half dividend will be much higher than their first) and they will be the champion yielders on the NZX, rather ahead than even TEL.

Theoretically you are supposed to multiply the possible reward by the probability of it happening then compare that to other shares...
So if the reward is 15cps tax free second half dividend times 50% chance of that happening over say $2.90 shareprice times 2 to get to a full year....gives you a return of about 5.1%....adjust for full imputation and you get to about 7% being a bit conservative....
How many NZ shares yield 7% gross dividend? Not that many. How serious do you think the government is in pushing UFB? I think they are quite serious...so I'm holding onto my CNU in the hope of seeing custard streaming down the face of the naysayers later this year. And there's no more enjoyable experience than that :-)

You can argue that what is good for CNU is bad for TEL (input cost) and vice versa (revenue gain for CNU) and therefore if you have an equal value of TEL and CNU then you are well hedged...a great feeling. However, personally, I think I would rather put the extra money into the next best return somewhere...

[biker]

I'm buying some more of these under 2.90. Good divi and some modest medium term upside potential. Somewhat de-risked at current SP levels IMHO

[tim23]

I see it as having some upside with increased broadband consumption.

[Food4Thought]

Any views on what's going on with CNU. The Div Reinvestment would be causing this drop off in share price, yet, is it all doom and gloom for them? Better for a long term hold? or is it simply over valued.

[Zeitgeist]

CNU continues its slide. Interesting to see how low it may go. I think the regulatory risk is now priced in but still offering 10%ish yield with govt review upcoming makes this a good income purchase. I think its unlikely comcom pricing will become effective, however if it did then the $0.255 cps yield is threatened. I will endeavour to look through reports, will be interesting to know book value per share
disc. own small parcel

[Zeitgeist]

Previous message not very well articulated...apologies.


I see Mr. Market is offering $2.69 for a slice of CNU. Wondering if the regulatory risk has been fairly priced in at these levels, or whether $2.69 is a screaming "buy"


Let's take a look:


Assuming it pays $0.255 cps as a perpetuity and using a cost of capital of 8%, CNU is worth $3.19 per share. A WACC of 8% does not seem unreasonable compared with other monopoly-type shares or infrastructure companies (see, for example, PWC's Appreciating Value: http://www.pwc.co.nz/appreciating-value/edition-three/)
If the UFB roll-out resulted in a 1% growth rate pa in earnings then I make CNU worth $3.64.


On a PE basis, using EPS of 0.42 and a multiple of 10, CNU should be worth $4.20 (I'm not 100% on 0.42)


In other words, in a regulatory riskless environment, I make CNU worth $3.19-4.20


However, with ComCom's UBA pricing review, Chorus has estimated the impact may wipe $150m of EBITDA. This is 150/671 = 22% of EBITDA. Decreasing the dividend by the same amount results in a yield of 0.198 cps. Back to a perpetuity basis of 8%, this makes CNU worth $2.47, 1% growth = $2.83


I reckon in a worst case scenario setting, CNU has neared the bottom. All CNU shareholders will be hopeful the Govt review makes ComCom's UBA pricing irrelevant. In that case, the current market price is a good buy.


A lot of ifs and buts here and the market always wins, but I'm at least optimistic of starting to claw back some of this year's losses. Of course, there are many better investments to be had too...

[Silverlight]

Lol, I assume you are old enough to enjoy a glass of Johnnie Walker Blue Label while perusing the kind of things I work with all day. So, let's say, mid-50's?

I guess the dividend yield would give you a 4% buffer in the SP if you were able to obtain a loan at that rate and the SP did dip. However, borrowing money to make more is how many fortunes were lost in the last crash...

Borrowing money to make money is how many fortunes are made as well.

[Huskeez]

Borrowing money to make money is how many fortunes are made as well.Bruce Kovner... Although i think if Sparky borrowed money he would continue to make a fortune ... me on the other hand.... disaster lol

[Jim]

Bruce Kovner... Although i think if Sparky borrowed money he would continue to make a fortune ... me on the other hand.... disaster lol

I think borrowing money to buy CNU is much a better bet than borrowing money to be a landlord. Consider the yield on houses and the yield from CNU when you are thinking of negative gearing and positive gearing by buying into CNU. Not to mention the possibility of a capital gain in CNU.

[glasszon]

It just fell to historic low, seems like people cares more about the ComCom action than the attractive yield.

[Zeitgeist]

In line with my previous post, I'm optimistic the Government's review of the Telco Act will trump ComCom's regulated pricing regime. However, there is a risk it won't and a smaller risk that it does but it is worse than ComCom's regulated pricing!

This is now an excellent income purchase. However, if you are looking for capital growth, I can think of several better options. These regulated companies are a different kettle of fish. What you think would be better-than-bank-account yields with capital preservation turn into huge regulatory risks with capital deterioration! (Not that I blame ComCom. I think they have a very tough job to do).

Before any new shareholders go long in CNU, make sure you're satisfied you can tolerate these regulatory risks.

[tosspot]

has anyone got dates for CNU upcoming events like comcom decision or next step in process and earnings dates of the top of their heads

[Poet]

I'm holding and I think will unfold as follows

ComCom will come out with final decision August which will probably make some concessions to Chorus's arguments - so maybe when implemented might be $100m off EBITDA. Current legislative framework has this taking effect from Dec 2014

Before then government will extend the implementation date to say Dec 2015

So for an investor, you get 25.5c p.a tax paid for the next three years - around 13% pre tax yield on current price.

If Chorus hasn't migrated a significant nummber of customers on to fibre by Dec 2015 then the reduction in EBITDA will start to bite.

I think good value for longer term holders at current prices and certainly room to see it at $3.50 if regulatory environment stays benign until end 2015

DYOR of course, but I'll stay the course

[bung5]

With the ex dividend recently been and the uncertainty until august I will be waiting until late July to see where the SP goes. Looks good entry at the moment but with it down trending at the moment better to wait out and see where it goes .

[glasszon]

Lots of sellers on the market now, could get quite ugly.

[The BOWMAN]

Chorus is also facing the risk of much larger cost overrun with the UFB deployment project though. Remember the issues with the XT network? I am expecting lots of delays and glitches from UFB. There will be plenty of negative news until it stabilizes.

[JayRiggs]

CNU dividend is paid out tomorrow. I think it'll go down further tomorrow onwards when some people will want to sell their allocated DRP units.

[JayRiggs]

It's already ex div though isnt it?

Yeah it went ex-div on 26th March and dividend is paid out 12th April.
But for people on DRP, they get their shares tomorrow, so they wouldn't be able to sell out of those until tomorrow.

I've seen it happen in the past for some other shares that do DRP like FPH, where it gets a wee bit of a sell off when DRP units are allocated.

Share dillution in general I guess.

[macduffy]

It seems a bit pointless to take shares in a DRP, rather than the cash dividend, and then incur brokerage to sell the shares, particularly when the timing requires opting for the DRP before you see how the SP performs ex div. I know it does happen though.

I have a DRP in place for a few holdings but only where I'm particularly confident about a company and anticipate a nice compounding effect over time!

:cool:

[777]

You can also sell an approximate number of expected DRP shares from your initial holding earlier and then just replace them with the DRP shares on payment date.

Don't the receipt of them tomorrow will drive the market down.

IMO of course.

[glasszon]

It is in complete freefall now, maybe the DRP shares did have an impact as people waits for their DRP shares before selling off their entire position?

[777]

It is in complete freefall now, maybe the DRP shares did have an impact as people waits for their DRP shares before selling off their entire position?

Less than 1% is a free fall? Obviously new to the market.

Sorry, may be a bit harsh.

[RazorX]

Hi Sparky

Just as an aside I was told that ACC's financial team is very good so "buy what they buy, and sell what they sell".

Also going by fundamental factors such as P/E x EPS (Currently $2.67) it would suggest that the price is now dropping under fair value. I am looking at buying more CNU but will probably wait until the current downturn shows signs of recovery. It might pick up next week, or it could continue down for a while.

As far as technicals go I agree with you, but RSI can stay oversold for a long time, and it's at its lowest ever price so no support below the current price. It will be interesting to see where the market finally finds support.

[RRR]

STC - amazing how behaviour changes! If you had posted that 2-3 years ago or before, you would have been attacked from all the corners by technical experts (including the most dreaded Mr Phaedrus- naming him with respect). Never ever average down, average up, go with the flow, never fight the market etc.

I am amazed that you are having such a smooth ride (me too :t_up: by luck only)and no one is questioning your approach to share investments!

[Joshuatree]

Int bit from a Broker.Regulatory uncertainty( built in to shareprice maybe) and capex risk given an increase in the est cost of the UFB communal network build.
They also expect CNU's EBITDA and NPAT to decline considerably as revenue falls slowly due to a slow drop in access lines as copper lines migrate to UFB fibre in non CNU regions and regulation cuts copper pricing operating costa slowly climb and new fibre assets start to be depreciated. Investment view higher risk than it appears at face value.

Maybe all that above is coming from a long term mindset and not considering the short -term opp.

[Joshuatree]

Top of the morning Sparky. NZ, something beginning with C.

[biker]

STC - amazing how behaviour changes! If you had posted that 2-3 years ago or before, you would have been attacked from all the corners by technical experts (including the most dreaded Mr Phaedrus- naming him with respect). Never ever average down, average up, go with the flow, never fight the market etc.

I am amazed that you are having such a smooth ride (me too :t_up: by luck only)and no one is questioning your approach to share investments!

Please excuse me if this is an ignorant question, but what happened to phaedrus?

[BIRMANBOY]

He phaeded away....Supposedly was going canal boating in France. Maybe he's stuck between locks?
Please excuse me if this is an ignorant question, but what happened to phaedrus?

[glasszon]

GENERAL: CNU: Changes to NZX 10 Index 10:21a.m.
CNU
15/04/2013 10:21
GENERAL

REL: 1021 HRS Chorus Limited (NS)

GENERAL: CNU: Changes to NZX 10 Index

STOCK EXCHANGE ANNOUNCEMENT

15 April 2013

Changes to NZX 10 Index

NZX Indices has announced changes to the NZX 10 Index as attached.

The changes will see Chorus removed from the NZX 10 Index effective at market
open on Monday 22 April 2013.

ENDS

For further information:

Brett Jackson
Investor Relations Manager
Mobile: +64 (27) 488 7808
Email: brett.jackson@chorus.co.nz
End CA:00235182 For:CNU Type:GENERAL Time:2013-04-15 10:21:38

Would we see index funds selling CNU since it is dropping out of NZX10?

[NZSilver]

Been keeping an eye on this guy for the last month, I do not hold presently, good solid Div and risk relative to price is diminishing, held previously but havnt for 6 or so months, price has really dropped out now and some more news today which wont help CNUs shareprice.


STOCK EXCHANGE ANNOUNCEMENT





15 April 2013





Changes to NZX 10 Index





NZX Indices has announced changes to the NZX 10 Index as attached.





The changes will see Chorus removed from the NZX 10 Index effective at market


open on Monday 22 April 2013.

[Silverlight]

Been keeping an eye on this guy for the last month, I do not hold presently, good solid Div and risk relative to price is diminishing, held previously but havnt for 6 or so months, price has really dropped out now and some more news today which wont help CNUs shareprice.

The net effect is basically zero.

While the Smart TNZ index fund will sell roughly 800k shares as Chorus is removed, Chorus is now added to the Smart MDZ index and fund, which will need to buy 700k odd of Chorus.

Index changes only effect the price a great deal when entrants are fast tracked in or out, like when MRP lists.

[NZSilver]

Decided to buy in again today, only a small portion, will top up if price reduces further, low was 2.63 but average around the 2.65/2.66 mark, only a few % in it but for this price its pretty cheap (P/E < 10, DIV - 10%) at the end of the day, this company owns some good physical assets. ComCom may cause a bit of trouble but risk at these prices is much reduced compared to possible positives.Have been looking at MRP and decided to put a little of the funs set aside into CNU instead. MRP vs CNU interesting debate...

[RazorX]

Hi NZSilver

I have been tossing around with that debate myself. I don't have enough funds to put into both so its and either or situation. Both have possbile regulation concerns (Labour announced that they would regulate the market to reduce electricity prices... no doubt an election ploy) Of course MRP has the Tiwai and Treaty concerns. CNU's dividend yield is better, but can it be sustained, and what effect will the loss of income resulting from the ComCom decisions have on EPS? At least the risks to CNU are somewhat quantifiable - I am going to do a what if analysis on CNUs earnings and see what I come up with. Lets face it - even if the current yield halved it is still a good share. I agree at these prices the risk is much reduced, and considering that the current CNU price is in the middle of MRP's expected range you at least know exactally what and how many shares you are getting.

On the other hand I already hold some CNU and a lot (For my portfolio) of TEL so am very heavy in shares in the communications industry... not sure if its better to futher this exposure or diversify into energy.

Lots of things to think about :)

[NZSilver]

Would be interested to know your results RAZOR, could you please post them on the forum. I agree with what your are saying, and I think CNU is a much better long term hold than MRP. As for TEL, I bought earlier this year and sold not soon after as I couldnt see much upside in the next year or so, maybe after restructuring ect. However TEL still cheap like CNU for DIV ect but it is in a lot more competative market and when ever I have to deal with them personally, ie my cell phone ect I find them extremely frustrating to deal with! so will wait and see if Simon tidies things up before buying TEL again.

[fish]

Decided to buy in again today, only a small portion, will top up if price reduces further, low was 2.63 but average around the 2.65/2.66 mark, only a few % in it but for this price its pretty cheap (P/E < 10, DIV - 10%) at the end of the day, this company owns some good physical assets. ComCom may cause a bit of trouble but risk at these prices is much reduced compared to possible positives.Have been looking at MRP and decided to put a little of the funs set aside into CNU instead. MRP vs CNU interesting debate...

Dont buy too much-I have been topping up as well.It could be a good time time to sell sky and by cnu .
My brother has just bought an online tv in the uk where they have good broadband speed-its a worldwide trend-
The explosive growth in Kiwi viewers’ demand for video content saw a record three million video streams for TVNZ Ondemand in March, signalling a "momentous shift in viewing behaviour," says TVNZ.

TVNZ Ondemand video streams were up 34% for the first three months of 2013 compared to the same time last year.

Kevin Kenrick, TVNZ’s Chief Executive, says: "For years industry pundits have been saying that online video will transform the way we watch TV. We’re now seeing more New Zealanders than ever before choosing to watch long form content on a range of devices, be it desktop, tablet, smartphone or smart TV. It’s a momentous shift in viewer behaviour."

Time spent watching broadcast TV has remained strong as Ondemand’s popularity has surged - indicating they co-exist as complementary, rather than competitive, viewing options.

Says Kenrick: "While the vast majority of viewing is still live TV, technology has finally caught up with consumer demand for greater viewing choice and flexibility. The growth in Ondemand endorses our commitment to make the most compelling video content available to viewers wherever they want it," he says.

TVNZ’s success is dependent on content, he says. "For decades, viewers have been hooked on the appeal of the video format - the combination of sight, sound and motion - and its availability has never been greater whether that’s broadcast on TV or streamed online. TVNZ is home to New Zealand’s favourite shows and this is the main draw card for our Ondemand viewers."

The growth in video streaming has been further fuelled by new mobile devices, internet connected TVs and improved data network connectivity. TVNZ’s skyrocketing Ondemand viewing follows its 26 February launch on iPad and iPhone. The app, the first of its kind in New Zealand, was downloaded 147,500 times in its first month.

"We’re expanding our Ondemand presence at a time more New Zealanders own video-capable devices and have better network connectivity than ever before. Households are taking advantage of more generous data caps, removing the headache of how much Shortland Street you can stream before it hits your back pocket or interferes with your viewing experience," says Kenrick.

"And with Ultra Fast Broadband being rolled out across the country and 4G networks being introduced by mobile operators, the smart money is on online viewing climbing even higher."

In a sign of things to come, overseas markets are reporting the appearance of Zero TV households - where programming is only watched on non-TV devices such as computers, tablets or smartphones

[GR8DAY]

I love a good value play, as posters will know, and I've already indicated in a post a few days ago that I bought into CNU at $2.65 late last week. My reason being that at $2.65 I considered the share "de-risked" from further drops since I believe the market is now factoring in most of the headwinds CNU is facing.

On today's pricing, CNU is on a gross yield of 13.4%. Yes, that's right 13.4%! And even with the worst case ComCom decisions, it will still be able to pay out 13.4% for the next two-three years. This is based on 25.5c in dividends divided by the price of $2.65, then divided by .72 to reflect the gross yield before tax.

But - let us assume the dividend drops to 15c beyond the next two years, which is not an unrealistic assumption if you believe the ComCom will deliver the worst possible result for Chorus.

(15c/$2.65) / .72 = 7.9%

Now, I don't know about you, but a yield of 7.9% in 3-4 years as a worst case sounds like a pretty good outcome.

So let us take this into perspective. A person who buys CNU today for a long term hold who suffers a cut to the dividend in 2015 and beyond can expect this

25.5 + 25.5 + 15 + 15 + 15 = 96c. Divide by 5 and you get an average of 19.2c

19.2c/$2.65 / .72 = an average 10% yield over five years.

Not bad in my opinion. And over five years there is plenty of scope for Chorus to address headwinds like higher than expected build costs and ComCom issues. If people work out that as a five year hold, CNU is perfectly acceptable at an average 8.25% yield, then $3.23 is a fair price.

Of course, there is always the further risk of capital reduction, but as I mentioned above, the price of $2.65 largely de-risks this.

hi Sparky.........you've got my attention! However the ANZ site is showing a yeild of 9.28% on current ppricing..........why is that so different to your figure (13.4%)??

Also can you (briefly) explain what this "ComCom" concern is all about?.......sorry Im a lazy investor and cant be bothered reading thru all the above!

Thanks in advance.

[NZSilver]

Cheers for that Sparky! Yeh I get a 9ish % div too.

[Corporate]

Sparky

Good post and analysis.

What are you thoughts on the UFB takeup. Everything I am hearing is that this is well below forecast.

Thanks
C

[Banksie]

The fibre uptake has been slow because the big broadband players Vodafone and Telecom had no UFB offering:

http://www.nbr.co.nz/article/adams-updates-ufb-numbers-many-homes-passed-few-customers-connected-ck-136359

Telecom started offering plans at the end of March:

http://www.stuff.co.nz/business/industries/8481610/Telecoms-entry-to-boost-UFB-uptake

So things could start picking up - problem as I see it though is would any of the existing broadband users want it? For most there is not a strong case to switch from their current service.

[percy]

CNU has come up on my watch list,however I have been put off by the charts.Terrible>?New lows.Down trend continues.
Why.?

[GR8DAY]

Hi Gr8day

First point - ANZ must be showing NET of tax, rather than gross.

The current price is $2.65. Divide by 25.5, and you get 9.62. Near enough to the ANZ figure.

I like to think of dividend yields in gross before tax terms, so you can compare to bonds, term deposits etc.

The second point is open to interpretation depending on your political and technological viewpoints, but I'll give it a go.

This May 2012 article by Brian Gaynor was written when the ComCom issues first became known.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10805262 (http://www.google.co.nz/url?sa=t&rct=j&q=&esrc=s&source=web&cd=2&ved=0CDgQFjAB&url=http%3A%2F%2Fwww.nzherald.co.nz%2Fbusiness%2Fn ews%2Farticle.cfm%3Fc_id%3D3%26objectid%3D10805262&ei=7a1tUY6iOKuUiQfN2oGYBQ&usg=AFQjCNHFPOe7HMucBGXm4o3GaFgvMm5XiA&sig2=wnhbj5gZc549Ym34Qn0WNw&bvm=bv.45218183,d.aGc)

Since then, the ComCom has reduced the impact of UCLL, but has brought in further draft proposals for unbundled bitstream access (UBA) which are very harsh for the company.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10851600

However, the government has signalled it is not happy and will potentially make changes to the regulatory environment (and to be fair, the ComCom questioned its own methodology when it released the draft, but said it was obliged to release the draft regardless)

http://www.nbr.co.nz/opinion/key-reaffirms-govt-willing-overrule-commerce-commission-chorus-pricing

The upshot is this. Having been split out of Telecom as a sop to anti-competitive politicking, and having entered into a public-private partnership with the government, Chorus and investors believed they should face light handed regulation. Instead, the ComCom appears to continue to wield a heavy stick. The consequences of the draft decision is that companies and investors won't invest in infrastructure if they can't make decent profits, and that there is no incentive for people to jump over to fibre if the ComCom forces the price of copper based broadband down to levels where there is artificially created demand for a cheaper, inferior product. The flip side is that Chorus is a very dominant telco lines player (but not quite a monopoly), people want cheaper broadband, and ISPs want to see the cheaper easier to deploy product kept as cheap as possible.

So the irony is this - the state is taxing you to build fibre, the best telecommunications network its believes the country needs, and then another wing of the state is forcing the price of the inferior alternative down to hold back uptake of fibre, for the benefit of other private companies who don't innovate or build anything! As a taxpayer, this should horrify you because the government spent $1.35b of your money to put fibre and ultrafast broadband into your streets.

Hence why the govt is right to step in, sort it out, and provide regulatory certainty.

YOUR RESEARCH PUTS ME TO SHAME!........thanks Sparky, don't know where you get the time to find all this out........guess I should cut down on the fishing a bit and MAKE more time for these important decisions! Having said that Im surprised the ANZ figures (or any figures for that matter) should be "after tax"......net?? I presume you are talking Personal Tax (LETS SAY %30%).......sorry again but Ive never been into collecting dividends much, more into chasing capital gains......well trying anyway.

[NZSilver]

This wouldn't be the first time the market has undervalued a stock? It has been a bumpy ride for many investors in cnu, I suspect many lossing a fair bit of dosh. I guess a few have pulled the pin and cut their losses.

[percy]

This wouldn't be the first time the market has undervalued a stock? It has been a bumpy ride for many investors in cnu, I suspect many lossing a fair bit of dosh. I guess a few have pulled the pin and cut their losses.

You are right offcourse.Market usually under values or over values.I am just nervous of the whole market at present,and suppose I am not wanting to go against the trend.

[GR8DAY]

You are right offcourse.Market usually under values or over values.I am just nervous of the whole market at present,and suppose I am not wanting to go against the trend.

...gotta say Im feeling the same Percy. Just about anything Ive touched over the last month or so has turned to custard (PGW, OGC, PEB.....), thus fast loosing confidence in the market. Think I'll just sit ,wait and (hopefully) watch this one drift a bit lower. Who knows it might go sub $2.50 the way it's all looking out there........globally.

[percy]

...gotta say Im feeling the same Percy. Just about anything Ive touched over the last month or so has turned to custard (PGW, OGC, PEB.....), thus fast loosing confidence in the market. Think I'll just sit ,wait and (hopefully) watch this one drift a bit lower. Who knows it might go sub $2.50 the way it's all looking out there........globally.

Every now and again I have a good idea.This year I have had no good new ideas.Does not worry me.What I do find is when you are sitting on cash,good ideas come to you .You only need one good idea now and again.One every year or two, and you can do extremely well.

[GR8DAY]

Every now and again I have a good idea.This year I have had no good new ideas.Does not worry me.What I do find is when you are sitting on cash,good ideas come to you .You only need one good idea now and again.One every year or two, and you can do extremely well.

.........let me know when you have your next one!

[Animeart]

Won't be surprised if CNU price dip below TEL as those people that were gifted CNU shares, when it was split off from TEL, would not hesitate to sell out to take whatever gain they can. At TEL's current price it's a win-win for those who held on this long anyway.

[fish]

Won't be surprised if CNU price dip below TEL as those people that were gifted CNU shares, when it was split off from TEL, would not hesitate to sell out to take whatever gain they can. At TEL's current price it's a win-win for those who held on this long anyway.
At the current cnu price its returning a gross dividend of over 11%.I dont see any of those holders 'gifted" shares selling off to make a better investment elsewhere. Sure we have regulatory risk that will knock the gloss of the price but bruised by it cnu has to rise again.
Optical fibre is the future about to happen.

[biker]

Appreciated the opportunity to top up at 2.64 today. There are certainly some volume sellers about, not showing in the depth.

[RazorX]

Well here are my results from attempting to predict what will happen to earnings re the regulation issue.

DISCLAIMER I did this for myself only but it was requested I post them. No responsibility is accpeted. The results are very subjective and a lot can happen. Once June comes with updated regulations and the 2013 full year report then I might be able to refine it a bit. I have also put a variable model that one can increase or increase % based on a set year.

I had to put the excel file in a Zip file because the forum won't accept excel files, or word files over 19kb!

Note this is the first time doing a projection like this. Please if you have comments, queries, or advice/suggestions on making it more accurate please tell me. Feel free to play around with the figures - if you come up with a more accurate result please post.

Regards

Razor

[NZSilver]

Cheers RX, much appreciated!

[NZSilver]

Just checked it out RZ, 2015 is the year where the cuts kick in by the looks of things and cause most of the trouble. If the UBA pricing change dosnt go ahead, it will be a big ups by the looks of things. The 20mil UCLL dosnt seem to cause to many headaches.

[RazorX]

Hi guys

Thanks for the support

I noticed if I factored in worst case scenario then SP is worth around $2.27 based on P/E x EPS. But if we cut the UBA to half of worst then SP is $5.64. Now I personally think that is too high, and probably by 2015 which I'm trying to project to there is likely to be more than 400m shares on issue, and P/E might not be as high as 13.15 so a few subjective factors there.

I think the main thing I can get from this, is that at even half of the worst case impact the SP is worth a lot more than currently. In fact I just wacked in taking 150m off income and SP came out at $3.53 so looks like CNU is still going to be a good buy at anything less than worst case scenario.

Certainly the 20m doesn't impact greatly by itself.

[BIRMANBOY]

Looks like this is gaining some ground and traction...I just bought in so hopeful and like the projected divs anyway. Adding to my freebies from the original unbundling.

[chad321]

Hi folks,

Brand new to the stockmarket (Mighty River Power), and am seriously considering taking up 2000 CNU shares. Was wanting to snap them up at $2.69 but am waiting on ASB securities to accept my application before I can purchase anything. Is there another cheap and immediate route I can take to purchase shares right away rather than waiting on ASB securities. Also, as I have no experience in the stockmarket, I'm going on a hunch that this is a good buy and a good time to buy. Please feel free to share any opinions.

Could there be any advantage in purchasing CNU shares on the ASX? Would dividends still work in the same way?

[chad321]

Thanks guys. I'm basically crossing my fingers in hope that the share price doesn't continue to rise before I can either purchase through ASB or direct broking (applied for directbroking.co.nz on Monday but it seems I need to wait for the application pack to arrive.

Any thoughts on what this latest development will mean for the immediate share price? http://www.nzherald.co.nz/technology/news/article.cfm?c_id=5&objectid=10883771

Rather than waiting for the conference / final determination, I would rather buy right now as I am unsure if there will be any dips as low as it currently is. Is this foolish or would others think it is the way to go?

[tim23]

Read your post from last month Sparky - well put, I think they are a sleeper and could easly sneak back over $3.00 in short oder.

[janner]

[QUOTE=chad321;406920

Welcome Chad..

" I'm going on a hunch that this is a good buy and a good time to buy. " ..

Chad.. I think if all here would be honest ( and in my opinion they are ).. We all started on a " HUNCH "..

Forget the HUNCH.. DYOR.. :-)0

You may well be right.. But I could not possibly say that .. :-)0

[Heffner]

Here's my 2c worth.

Chorus is being punished terribly because of the regulatory overhang. It will probably be moderated somewhat in CNU's favour, but until the determinations are released for the Telco review and unbundled bitstream access, then the price will remain depressed.

So at the moment, CNU is on an approx 13% yield. That is clearly irrational. You couldn't get a 13% return from a loan sharking finance company in 2007, let alone one of NZ's biggest companies.

Now, the yield will decrease sometime in 2015, given the regulatory changes coming. But even if payouts got slashed by a third, the worst case scenario, you would still get a 8.7% yield on current prices!

Now, Chorus would be painful if you bought at, say $3.40, the price before the draft UBA changes were proposed last year. You'd be buying on a 10.4% yield, dropping to 6.8%, which is unacceptable for a yield oriented company.

So hence the risk.

but as I point out, if you own CNU at today's prices for the next five years, you still enjoy the huge yields for a couple of years before the worst case kicks in.

And what happens if the worse case doesn't happen?

:-)

All really good points STC. I have personally been accumulating CNU ever since it dipped below $3 and will continue to do so as long it stays there.

Apart from the above points you have raised due to my occupation I have had a lot of dealings with Chorus. From what I understand from those involved this is a great long term hold. High yield currently and post 2020 when the fibre is laid Chorus will have little to no expenses but bringing in high revenue from usage. Their staffing levels are very low with most of their workers contractors completing the work on the lay out of the fibre and from the horses mouth the upkeep and maintenance of fibre is much less than the messy copper lines.

[edgar]

All really good points STC. I have personally been accumulating CNU ever since it dipped below $3 and will continue to do so as long it stays there.

Apart from the above points you have raised due to my occupation I have had a lot of dealings with Chorus. From what I understand from those involved this is a great long term hold. High yield currently and post 2020 when the fibre is laid Chorus will have little to no expenses but bringing in high revenue from usage. Their staffing levels are very low with most of their workers contractors completing the work on the lay out of the fibre and from the horses mouth the upkeep and maintenance of fibre is much less than the messy copper lines.

Tend to disagree there Heff. Chorus has over 700 permanent staff with loads more on fixed term placements so by no means a small staff overhead.

Sparky: One is that it is more expensive than Chorus initially forecast to deliver fibre to the premises. Building the network through footpaths was the easy part. Getting fibre down long driveways and into apartment buildings has been far more problematic and expensive. So Chorus get to push this out.

Lets put this in perspective, they really got it wrong with cost estimation for delivery and their boots were a little bit too big. We should see it dip below $2.50 at the end of this month and start falling even further in June as TEL start looking to other providers to save money.

JMV

[chad321]

Well it seems today is my day to buy. Would anyone expect a rise or a dip in price earlier in the day or later? With regards to the government budget, and the newly announced cutting of the price it offers it's premium service VDSL.

[chad321]

Shot up 4 cents right away. Hope that goes down again before purchase.

[000831]

It's wrong to buy this kind of stock on th graph in the bull market. Wrong timing.

[chad321]

Apologies, I'm not sure what you mean by this? Can you explain?

[Billy Boy]

It's wrong to buy this kind of stock on th graph in the bull market. Wrong timing.
really !!!
BB:confused:

[J R Ewing]

It's wrong to buy this kind of stock on th graph in the bull market. Wrong timing.

I don't follow either. Are you saying that the market has run up too high for all purchases, and that chad should have been in sooner? If so, that makes no sense whatsoever with this stock, all earlier entry points were at a higher price!

[Billy Boy]

Be patient. Chorus aren't likely to be going anywhere until the govt/ComCom announce the next steps regarding unbundled bitstream access and the Telco review.

Chorus is cheap, in my opinion, because of the regulatory overhang. The price currently reflects the worse case situation, again in my opinion. Here is the link to my thoughts on why Chorus was a great buy at $2.65 a month ago. (http://www.sharetrader.co.nz/showthread.php?8673-CNU-Chorus&p=402077&viewfull=1#post402077)

The upcoming dates of interest with the ComCom are:
(http://comcom.govt.nz/uba-benchmarking-review/)
June 12-13, which is a conference on methodology with the Telco industry
August 15, the final determination

I,m with this kind of thinking.
I've been through a few "Share Market Crashes". And never lost my money. Coz I never sold any shares.
Just kept accumulating...... ;)
BB

[BIRMANBOY]

You will notice that shares go up and also go down....As Homer would say duhhhh...everybody know that right?. Trying to buy at the "right" moment is admirable and always worthy but statistically impossible. So the answer...when you have decided yourself (without being prompted by all the other posters) to implement an action set a range and be patient. You may miss the first bus...but quite often theres another one not too far away. And if there isnt..then its back to the drawing/analysis board to ponder other possibilities or perhaps reset existing strategy. Buy in haste is only done at 10pm Xmas Eve and you forgot Mums present. 4 cents is only important if you are trading in and out for quick profit.
Shot up 4 cents right away. Hope that goes down again before purchase.

[000831]

He's suggesting that CNU is a bear in the bull ring and that if a correction comes then it will get sold off just as badly as any other stock while it is already down, regardless of yield. I'm with ya 000831!

Yes, you got me. CNU swims between 2.70 and 3.40, no space to have great return. better on the board of DIL, RYM, SUM, DGL, WHS those kind of shares on the curve. CNU good for dad and mum investors.

Sold off DGL and WHS two days ago with 3.6% return but really hard to get into MILK now....... worries me. 100% cash waiting for the index dip, then jumped into that milk cow.

[BIRMANBOY]

I think you are in a minority here BB but BB agrees with you..too much movement not enough patience.
I,m with this kind of thinking.
I've been through a few "Share Market Crashes". And never lost my money. Coz I never sold any shares.
Just kept accumulating...... ;)
BB

[BIRMANBOY]

Moosie CNU is at a low...so your prediction of sell off possibility is not in the same dynamic as a selloff of something at a high. Still that whats make the share market interesting.. people see the same thing totally differently. Your prediction is suspect to me but in your own mind you no doubt see it as a no brainer. Sigh...:huh:
He's suggesting that CNU is a bear in the bull ring and that if a correction comes then it will get sold off just as badly as any other stock while it is already down, regardless of yield. I'm with ya 000831!

[BIRMANBOY]

No he appears to prefer to buy high and have a yield of 3.6% apparently.
Might not be "great" but if you can ride a run in the range you suggest then 25% return not bad no?

[chad321]

I may very well be a small time Mum and Dad investor, even if I'm years away from being one in the literal sense. I am completely new to this game but have started myself with 2000 MRP shares and 2000 CNU shares. Time to sit back and see what happens with the com com announcement and the 2014 elections in regard to MRP. Suppose I would also keep an eye out for a promising tech company.

For the record, I wanted to get CNU at $2.69 but did not have an account, finally got my account today and settled for $2.78. By the way I appreciate everyone's input.

[Billy Boy]

I think you are in a minority here BB but BB agrees with you..too much movement not enough patience.
:mellow:..:p...:)
BB

[BIRMANBOY]

As a new investor you have done well (in my opinion). All of my better gains have been predicated on buying value at a low price...CNU fits that bill.
I may very well be a small time Mum and Dad investor, even if I'm years away from being one in the literal sense. I am completely new to this game but have started myself with 2000 MRP shares and 2000 CNU shares. Time to sit back and see what happens with the com com announcement and the 2014 elections in regard to MRP. Suppose I would also keen an eye out for a promising tech company.

For the record, I wanted to get CNU at $2.69 but did not have an account, finally got my account today and settled for $2.78. By the way I appreciate everyone's input.

[000831]

No he appears to prefer to buy high and have a yield of 3.6% apparently.

11 trading days (ATM) for 18%, 4 trading days (GDL &WHS), 3.6%. I am a short term trader. have to say if hold CNU for long enough, they still have 25%-30% return, but too long for people like me play with graphes.

[BIRMANBOY]

What can I say....live fast ..die young..:p Thats what makes the share market work I suppose...traders to boost volume and keep the brokers happy and holders to provide some stability so you dont get huge extremes in the SP. Long may we prosper.
11 trading days (ATM) for 18%, 4 trading days (GDL &WHS), 3.6%. I am a short term trader. have to say if hold CNU for long enough, they still have 25%-30% return, but too long for people like me play with graphes.

[Billy Boy]

11 trading days (ATM) for 18%, 4 trading days (GDL &WHS), 3.6%. I am a short term trader. have to say if hold CNU for long enough, they still have 25%-30% return, but too long for people like me play with graphes.
So.... with your logic there is going to be a downward correction soon, based on the fundies.
Correct ?? sckeews my ignorance
BB

[000831]

So.... with your logic there is going to be a downward correction soon, based on the fundies.
Correct ?? sckeews my ignorance
BB

I do not think CNU is going down. around MA30 line, there might have a little dip with support, that's my chance to get into. I do not mind to give you guys a push up if stays over the MA30. However, this one with limited potential, say 10%-15% for 1-2 month time? not excited. after that, it may sit around 3.20 for half year........

[Billy Boy]

I do not think CNU is going down. around MA30 line, there might have a little dip with support, that's my chance to get into. I do not mind to give you guys a push up if stays over the MA30. However, this one with limited potential, say 10%-15% for 1-2 month time? not excited. after that, it may sit around 3.20 for half year........
Right gottya....
Tks 4 that
BB :)

[000831]

Right gottya....
Tks 4 that
BB :)

This one is really boring. I prefer KMD style.

[BIRMANBOY]

LOL...boring... you gotta love this guy.
This one is really boring. I prefer KMD style.

[000831]

LOL...boring... you gotta love this guy.

Debt ratio too high, never love it. hit and run

[BIRMANBOY]

Not WHS you twit...its you I love...most people work the stockmarket to make money...being afraid of boredom never occurred to me as a reason. Live and learn.
Debt ratio too high, never love it. hit and run

[000831]

buy in, volume up now

[chad321]

buy in, volume up now

In the interest of learning. Why advise to buy in when volume is up? Do you look at a chart to determine volume is up?

[000831]

In the interest of learning. Why advise to buy in when volume is up? Do you look at a chart to determine volume is up?


I bought in this morning, not advise anybody

[chad321]

I bought in this morning, not advise anybody

Oh ok my mistake. Thought "buy in", meant "now would be a good time to buy in". I noticed on nzherald that the skytv outage yesterday was due to a Chorus fibre link going down.

[J R Ewing]

Oh ok my mistake. Thought "buy in", meant "now would be a good time to buy in". I noticed on nzherald that the skytv outage yesterday was due to a Chorus fibre link going down.

Chad,
000831's English isn't good enough for you to understand him. So even if he does know what he is talking about you are unlikely to benefit from that!

Yesterday, we got the impression that he was not interested in a 25% return if he had to have his money in for months on end, today it appears it is a short term trade. Tomorrow, who knows?

[Billy Boy]

Hey Sparky....
your sums ????
25.5/(6 - 1)=$3.64..... ? geezz, and all that money your poor old parents spent on your education.
25.5/(8-1)=$3.64... I think.
Yea I know, your gonna say it twas a typing error... I invented that one.
BB :D
ps.. Must be your maths are as good as my spelling !!

[Zeitgeist]

Hey STC your $3.64 looks familiar to me :p

Glad to see you've moved a little onto the table for CNU. I totally agree with your logic that, even in a worst-case scenario, this current price would generate a tidy dividend. The only additional risk in a WCS would be that CNU must re-consider its dividend policy. I understand they are restricted from paying divvys if they breach a certain credit rating. Not saying that will happen, but worth keeping an eye on.

Still well worth the risk. Rare to find a stable monopoly offering 12%+ yield with capital growth (30-40%) potential. Just wish I hadnt been in at $3+

[NZSilver]

Latest comcom decision, can anyone explain, way to wordy for my brain.

[chad321]

Also, have seen this mention a lot on announcements, Notification of issue of CFH securities.
What implications does that have for CNU if any?

[chad321]

Well they are up today so it can't be too bad....... can it?

[000831]

Wireless speed record of 40 Gbps claimed by German researchersMay 18, 2013 | By Tammy Parker (http://www.sharetrader.co.nz/author/TammyParker)

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Comment (http://www.sharetrader.co.nz/#disqus_thread)
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A wireless speed record was set in Germany, where researchers used 240 GHz spectrum to deliver a peak data speed of 40 Gbps over a distance of one kilometer. The speed record is said to equal the transmission of a complete DVD in less than one second.


http://assets.fiercemarkets.com/public/sites/wireless/highfrequencychip.jpg (http://www.fiercebroadbandwireless.com/story/wireless-speed-record-40-gbps-claimed-german-researchers/2013-05-18)


The high frequency chip only measures 4 x 1.5 mm².
Source: Sandra Iselin/Fraunhofer IAF



Credit for the feat goes to the Fraunhofer Institute for Applied Solid State Physics and the Karlsruhe Institute for Technology (KIT), which said the new world record complements the transmission capacity of optical fiber. "In the future, such radio links will be able to close gaps in providing broadband internet by supplementing the network in rural areas and places which are difficult to access," said the institutes.
Distances of more than 1 kilometer have been covered by using a long-range demonstrator, which KIT set up between two skyscrapers as part of project Millilink. Because the size of electronic circuits and antennas scales with frequency/wavelength, the transmitter and receiver chip are quite small, measuring 4 x 1.5 mm².Further, the atmosphere in the 200 and 280 GHz frequency range shows low attenuation, enabling broadband directional radio links. "This makes our radio link easier to install compared to free-space optical systems for data transmission. It also shows better robustness in poor weather conditions such as fog or rain", said Jochen Antes of KIT.

Read more: Wireless speed record of 40 Gbps claimed by German researchers - FierceBroadbandWireless (http://www.fiercebroadbandwireless.com/story/wireless-speed-record-40-gbps-claimed-german-researchers/2013-05-18#ixzz2TswgeDMp) http://www.fiercebroadbandwireless.com/story/wireless-speed-record-40-gbps-claimed-german-researchers/2013-05-18#ixzz2TswgeDMp
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Read more: Wireless speed record of 40 Gbps claimed by German researchers - FierceBroadbandWireless (http://www.fiercebroadbandwireless.com/story/wireless-speed-record-40-gbps-claimed-german-researchers/2013-05-18#ixzz2TswXWQ1X) http://www.fiercebroadbandwireless.com/story/wireless-speed-record-40-gbps-claimed-german-researchers/2013-05-18#ixzz2TswXWQ1X
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[chad321]

Company website mentions dividends of 25.5 cents per share in FY13. Does this mean they gave 10 cents per share in April and expect to give a further 15.5 cents per share in September?

[CJ]

alternatively: http://www.chorus.co.nz/dividend-information

[Statistically Deviant]

5% - 20% undervalued (WACC 9%; Growth 0-1%)? Market pricing in potential impact Commerce Commission decisions?

[chad321]

What is to stop people from buying shares very close to when dividends are payed out to receive these payouts? I would think they must have had the shares before a particular date?

[CJ]

What is to stop people from buying shares very close to when dividends are payed out to receive these payouts? I would think they must have had the shares before a particular date?Nothing.

You have to hold on the 'ex date' (refer my link above) to qualify for the payment.

In theory, all else being equal, the share should drop by an equal amount to the dividend payment following the day it goes ex dividend.

[Statistically Deviant]

Yes you're right. Ex dividend dates are set after which a security holder is not eligible for the dividend. See upcoming dividends section: https://nzx.com/markets/NZSX

[macduffy]

Nothing.

You have to hold on the 'ex date' (refer my link above) to qualify for the payment.

In theory, all else being equal, the share should drop by an equal amount to the dividend payment following the day it goes ex dividend.

And, again in theory, the shareprice should have previously firmed in anticipation of the dividend! Doesn't always work out that way of course, particularly if the divvy doesn't conform to market expectations.

[CJ]

Picked up some more CNU at $2.67. Colour me happy :cool:Do you not consider it is in a down trend. Why not wait till it starts to show some life?

Do you use any indicators to trigger a time to buy or do you buy purely on fundimentals?

[Beagle]

Picked up some more CNU at $2.67. Colour me happy :cool:

In my view no matter which valuation methodology one uses this stock is in a clear down-trend hampered in no small way by regulatory concerns. Until these concerns are rectified I struggle to see how it can make meaningful ground but i've put it on my watch list for possible action / possible dividend stripping when the chart says the down-trend is at an end. From a technical perspective at this point in time I see no reason to buy anytime soon. My 2 cents on this unloved pup.

[airedale]

[Hi Sparky havn't followed this one but a quick look at Stocknessmonster charts for CNU shows a high point this year of $2.55 in mid february.

, QUOTE=SparkyTheClown;408373]Well I don't use technicals for individual stocks. I only use to inform on overall market sentiment. At the price I paid, I'm getting a stock at 13.3% yield, which could drop to 8.6% yield depending on ComCom predation. But may in fact stay above 10%.

It would have sucked to buy this at $3.40 or higher, as you may end up on a yield of only 7% gross. But I'm pretty happy buying where it is now.

As a fundamental analysis investor, I look at the CEO in mid march buying $250k worth of CNU on market at around $2.97, and think, well, he's not doing it for kicks....[/QUOTE]

[Snow Leopard]

...As a fundamental analysis investor, I look at the CEO in mid march buying $250k worth of CNU on market at around $2.97, and think, well, he's not doing it for kicks....

Given that he his capital loss is about the same as a years dividend he may not be a happy colour!

All time intraday low is $2.63 , all time closing low is $2.64 which it hit again today. If this is the bottom great, but the balance of probability says it will go lower.

So is this a growth stock or just a pure dividend play for the bad times ahead?
Is it worth the current risk?

Best Wishes
Paper Tiger

PS airedale's $2.55 in Feb is AU$.

[Hoop]

Well I don't use technicals for individual stocks. I only use to inform on overall market sentiment. At the price I paid, I'm getting a stock at 13.3% yield, which could drop to 8.6% yield depending on ComCom predation. But may in fact stay above 10%.

It would have sucked to buy this at $3.40 or higher, as you may end up on a yield of only 7% gross. But I'm pretty happy buying where it is now.

As a fundamental analysis investor, I look at the CEO in mid march buying $250k worth of CNU on market at around $2.97, and think, well, he's not doing it for kicks....

No buy signals anywhere...
S&R investors may decide to have a go for a quick 6% return (sell at 2.80) with tight stops.

http://i458.photobucket.com/albums/qq306/Hoop_1/CNU21052013.png (http://s458.photobucket.com/user/Hoop_1/media/CNU21052013.png.html)

[BIRMANBOY]

Yes buying anywhere in these ranges is good buying. All of my instincts tell me this has become an "unloved" but good value share. Not many of these round at moment so buying makes good sense. Hoops chart to my uneducated eye shows growing resistance among sellers which means lower movement is possible but essentially limited and picking up a decent amount will become more difficult. I see a considerable upside potential in this in the future. And if not as fast and as large as one would hope you can console yourself with div yield.
Interesting charts.

But iIm still buying on a 13% plus yield and I have reasonable confidence the decisions of the ComCom and govt over regulation and the Telco review will restore confidence back in CNU. Not because Chorus gets everything it wants, but because it will remove much of the uncertainty about regulation. I personally feel that with the price I'm paying, it's mostly de-risked (but of course, not completely de-risked.)

PT - I would have thought a CEO would be well placed to make a judgment about the future of their company. It's not a small investment easily ignored either.

I see risk not just in terms of business model, market and sector vagaries and similar, but also as a function of price. Chorus at $3.20 was risky. At $2.67, I don't see it with the same risk.

Anyway, if it does go a bit lower yet, I can continue to buy more....

[000831]

downtrend? a rocket jump would ready to go! Something big coming out soon

[000831]

Agreed, I was just wondering if he actually had any useful insight of just full blown speculation. Also I'm not sure how he can question the downtrend. 100 day MA has been tracking lower for roughly a year now...... Realy I'm just trying to get a gauge on whether this guy (girl) offers any valuable insight at all - most of the comments I read are pretty rubbish but I'd like to give him the benefit of the doubt and see if he can expand


4536


try this chart. :t_up:

The current price is close to those fund managers who bought in this Jan if they still hold CNU. Gain or loss, reduce holdings or increase holdings, their calls.

[BIRMANBOY]

What was that 24 down and 10 letters?
downtrend? a rocket jump would ready to go! Something big coming out soon

[Hoop]

Hmmm ....I might expand on my last chart on page 23 (http://www.sharetrader.co.nz/showthread.php?8673-CNU-Chorus/page23)....looking at the candlestick chart this is a volatile stock and is prone to gapping...you could wake up one morning and its either jumped up or down ...depending on the various news.
I deliberately used candlesticks as opposed to a line chart to show these gap up and gap down movements...notice how the gap ups and gap downs are around a certain price area.....Gaps make good reliable support and resistance lines or zones..... 000831 has shown that a sudden gap up could occur again ..probably by observing the shares past movements

downtrend? a rocket jump would ready to go! Something big coming out soon
Based on CNU trading history this event is probably a sure thing to occur again..... looking at my candlestick chart 2.90 - 3.05 and 3.25 - 3.35 areas seem to have the highest chances of a gap occurring again.

[000831]

Hmmm ....I might expand on my last chart on page 23 (http://www.sharetrader.co.nz/showthread.php?8673-CNU-Chorus/page23)....looking at the candlestick chart this is a volatile stock and is prone to gapping...you could wake up one morning and its either jumped up or down ...depending on the various news.
I deliberately used candlesticks as opposed to a line chart to show these gap up and gap down movements...notice how the gap ups and gap downs are around a certain price area.....Gaps make good reliable support and resistance lines or zones..... 000831 has shown that a sudden gap up could occur again ..probably by observing the shares past movements


Based on CNU trading history this event is probably a sure thing to occur again..... looking at my candlestick chart 2.90 - 3.05 and 3.25 - 3.35 areas seem to have the highest chances of a gap occurring again.


With the support from those conservative fund managers, 5%-9% would be most of their annual returns range.

CNU 0-1% growth rate, stable divident yield, high debt ratio (OMG!!!), is right target company.

Game Theory for those fund managers

assume A & B funds

A & B both sell, price down 10%
A sells and B buys, price unchanged
A buys and B sells, price unchanged
A& B both buy, price up 10%

pressure, pressure on the monthly performance reports, conservative fund managers, what do you think about CNU by end of May? Do not think bond market for a while. OCR so low, then sharemarket would be chance to increase holding.


Gain together, or die together?

Best outcome would be buy together once again to secure the dividend yield and capital gain, then we are happy together.

With me, bro. 20-25% plus 13% dividend yield. could be an ideal investment for you.

[glasszon]

Ouch, the magical 2.65 barrier has broke right through with not many buyers in sight, it could get quite ugly indeed.

[Beagle]

Downtrend continues, plenty of sellers at $2.60 now with very little depth on the buy side.

I'm all for a good fundamental analysis of a stock but I also believe one ignores trends and technical analysis at their peril. Interested but can't see any reason to be in a hurry.

[glasszon]

Really tempted to buy some but certainly not keen to stand in front of this train, might let the dust settle down a bit first.

[biker]

Picked up some more at 2.58. VWAP still 2.65 today.

[mcdongle]

Chinese pmi??

[000831]

Japan crashed by 7.3%

[000831]

Hong Kong down by 2.6%, the problem is ...............see chart of HS index

4538