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30-05-2017, 06:22 PM
#4761
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30-05-2017, 06:57 PM
#4762
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30-05-2017, 08:52 PM
#4763
Member
Originally Posted by Roger
Very smart move by SUM. Julian Cook obviously using his investment banking background to diversify the funding base and locking in further funding for strong ongoing growth at close to 50 year interest rate lows. This together with the recently expanded $600m bank facility will provide a LOT OF HEADROOM for opportunities for land banking purchases at low prices if the market turns down.
The irony is this opportunity will probably appeal a lot to existing residents.
Yup, reckon your right on this one. Interest rate rises are on the way in NZ. I've received two in as many years, circa a tenth of a percent each time.
Correct me if I'm wrong but bonds simply allow management too manage debt. If you are managing lots of dough every ounce counts.
Its time for Sum to jump the ditch, otherwise growth will end.
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30-05-2017, 10:17 PM
#4764
Member
Would you expect people interested in the bond offer could be selling their SUM shares (to reduce exposure to the same company) or would this not have much effect?
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31-05-2017, 06:53 AM
#4765
Originally Posted by Elles
Would you expect people interested in the bond offer could be selling their SUM shares (to reduce exposure to the same company) or would this not have much effect?
No,and no effect.
What I think may surprise people, is the number of SUM residents who will buy SUM bonds.
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31-05-2017, 09:33 AM
#4766
Originally Posted by Carpenterjoe
Yup, reckon your right on this one. Interest rate rises are on the way in NZ. I've received two in as many years, circa a tenth of a percent each time.
Correct me if I'm wrong but bonds simply allow management too manage debt. If you are managing lots of dough every ounce counts.
Its time for Sum to jump the ditch, otherwise growth will end.
Absolutely right. This is simply a debt management tool and diversifying their funding base and locking in funding at low rates. https://www.nbr.co.nz/article/summer...Heads%252520Up
On the Australian thing...they have PLENTY of headroom for growth here with 6 years of land banked. They're giving themselves heaps of headroom for more land acquisitions which could become available in any market downturn at very attractive prices. Bare land typically has a much higher beta coefficient than houses so if the market corrects 5% overall bare land could go down by a factor of several times that which could throw up some outstanding opportunities for further site acquisitions.
Originally Posted by percy
No,and no effect.
What I think may surprise people, is the number of SUM residents who will buy SUM bonds.
Agree 100%, they know the brand well and with a very strong 94% satisfaction rating will relish the opportunity to invest in a well known brand they know and love and get a return on their money that's higher than bank term deposits and trade-able on the NZX market in case they need urgent funds for an operation.
Last edited by Beagle; 31-05-2017 at 10:04 AM.
Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.”
Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine
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31-05-2017, 10:22 AM
#4767
Originally Posted by Roger
...
Agree 100%, they know the brand well and with a very strong 94% satisfaction rating will relish the opportunity to invest in a well known brand they know and love and get a return on their money that's higher than bank term deposits and trade-able on the NZX market in case they need urgent funds for an operation.
True so many so-called "elective" medical procedures are available only if you go privately or unless you wait in pain on ever lengthening public waiting lists (if you make it that far). Maybe the SUM residents should invest the net interest from their SUM bonds into private health insurance, if they can afford the expensive rates for oldies...
As for buying SUM shares or SUM bonds. I had been thinking of topping up my SUM shareholding but as it is already a good size I well may opt for the bonds if the interest rate is around 6.5%+
Last edited by Bjauck; 31-05-2017 at 10:23 AM.
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31-05-2017, 10:32 AM
#4768
Originally Posted by Bjauck
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As for buying SUM shares or SUM bonds. I had been thinking of topping up my SUM shareholding but as it is already a good size I well may opt for the bonds if the interest rate is around 6.5%+
Similar position. Only problem with that approach is that we probably need to commit the money before we know about the interest rate. Sounds like they are going through an institutional book building process. Yes, 6.5% would be sweet, but not sure we get there. Listed IFT bonds (probably similar security) are currently traded around 5.6 - 5.7%;
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"Prediction is very difficult, especially about the future" (Niels Bohr)
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31-05-2017, 11:20 AM
#4769
I'm far from overweight in SUM so rather than buying the bonds I'll be looking at SUM more shares when the shareprice "consolidates". Less income, but the growth prospects have more appeal - for me.
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31-05-2017, 02:48 PM
#4770
Member
Just spoke to my broker he thinks 4.5 to 4.7%.
Would you expect the shares to perform better than this anyone?
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