BCS - BrisConnections Unit Trusts

[rocket12]

Re: Brisconnections shareholders - financial ruin

On the face of it , it appears reasonable, let these mums and dads as you call them know via email of the dangers.

It then spreads.

An announcement is made as they click the buy button. Should they be allowed buy or warned of the announcement. ??

The rest of us have to put up with mountains of emails warning us of what we already know.

Best leave it as it is.

They shouldn't be in the market if they don't understand or read the dangers inherent in trading.

They'll be more careful next time.

gg

Not sure why your talking about emails. When you buy the shares online there is a buy page (take a look at the screencaps on page 2 of this thread) that tells you how much the trade is going to cost you. All they have to do is tell you that instead of the trade costing you $2k it's going to cost you $4 million. I think that might of influenced to not click the buy now button.

 

[chops_a_must]

Re: Brisconnections shareholders - financial ruin

My first reaction if buying something with a 5 letter code would be, "why the hell am I buying an option?"

I'm confused as to how people did not investigate further. Surely they would know that these aren't normal shares, and "normal" shares only have 3 letter codes.

 

[rocket12]

Re: Brisconnections shareholders - financial ruin

My first reaction if buying something with a 5 letter code would be, "why the hell am I buying an option?"

I'm confused as to how people did not investigate further. Surely they would know that these aren't normal shares, and "normal" shares only have 3 letter codes.

I always thought options (shares that have options) were four letter codes, and in Commsec it states clearly on the main pages of each option that its an option and gives the expiry date. And when you go to the buy page it tells you its an option and when it's going to expire. The same should have been done with the Brisconnect shares, giving the dates of the next two installments.

Also when you look up shares in the Age (which is where I initially looked) It just lists them as Brisconnect. Whereas shares that come with options are listed as options with the expiry date.

 

[cuttlefish]

Re: Brisconnections shareholders - financial ruin

The same if you look them up on the ASX site. Type in BCSCA in the price search field, and no mention is made that its a partly paid securiy in the price results. Click on the hyperlinked BCSCA stock code in the price results to get company information and it makes no mention that I can see either, and no link to the product disclosure statement either.

Also, even if people were aware they were partly paid, they may have thought the additional instalments were optional. It is only in the subsections of the PDS that it is made clear that they are not optional.

 

[rocket12]

Re: Brisconnections shareholders - financial ruin

The same if you look them up on the ASX site. Type in BCSCA in the price search field, and no mention is made that its a partly paid securiy in the price results. Click on the hyperlinked BCSCA stock code in the price results to get company information and it makes no mention that I can see either, and no link to the product disclosure statement either.

Also, even if people were aware they were partly paid, they may have thought the additional instalments were optional. It is only in the subsections of the PDS that it is made clear that they are not optional.

If you do click on the hyperlinks BCSCA code in the price results and then click on "ASX code, security description" drop down menu it does give you "BCSCA, stapled security paid to $1.00 $2.00 unpaid"

This is good and what should be on every page inside the BCSCA research area of every online broker. If they can do it for options and other variations from normal shares then they should have done it for these contributing shares.

 

[rocket12]

Re: Brisconnections shareholders - financial ruin

I always thought options (shares that have options) were four letter codes, and in Commsec it states clearly on the main pages of each option that its an option and gives the expiry date. And when you go to the buy page it tells you its an option and when it's going to expire. The same should have been done with the Brisconnect shares, giving the dates of the next two installments.

Also when you look up shares in the Age (which is where I initially looked) It just lists them as Brisconnect. Whereas shares that come with options are listed as options with the expiry date.

Just seen that there are 5 letter options!! (non share options) For some reason I cant look them up on commsec via their codes...

 

[Enzyme]

Re: Brisconnections shareholders - financial ruin

The Eureka report ( http://www.eurekareport.com.au/ ) did a report on Brisconnections this week.

I will not quote the entire article out of respect for their copyright, but here is a snippit:

I asked BrisConnections chairman Trevor Rowe whether there is any prospect of improved terms or a change of heart within the BrisConnections team. Rowe says the PDS fully disclosed the terms of the deal. He also says his company must legally make its “best endeavours” to get the money from investors who don’t pay up, and that includes the use of debt collectors.

But is using debt collectors feasible? Tony Aveling, the chief executive of Collection House, the biggest debt collection agency in Australia, says: “I don't think it is. I just don't think you'd get to collect a lot of money in any exercise to do with BrisConnections."

I think when you see the chief executive of a debt collection agency publicly shooting down the notion of chasing small shareholders and day traders for instalment dues, not to mention his willingness to turn down potential new business before it even comes to his door, it's safe to say the debt collector route is pie in the sky.

 

[Sunder]

Re: Brisconnections shareholders - financial ruin

Hehe, my wife makes a good point. It seems the peeps who know about the 5 letter code are also the ones not blessed with much logic or sense of whats right and wrong.

I think you've hit the nail on the head right there. (I know I said last post, but this really gets my goat) Not that we don't have much logic or a sense of what's right and wrong, but we have a different, and I would argue, a more mature logic and sense of right and wrong.

It is "right" to make sure that kids do not have to bear the full force of their mistakes while they are learning. It is right to make sure that adults do. We have a lower set of expectations for children. For example, when a child plays on railway tracks and gets hit by a train and is injured, we claim more needs to be done to ensure safety, and we talk compensation for "failed safety systems". If an adult does the same, we say "too bad, but he knew the risks when he climbed the fence to get in".

You, presumably, are an adult, yet you want the protection of a learning child, claiming that people did not make you aware of the facts, despite the facts being freely available in many different places.

You're like the guys in America who sue because Starbucks didn't write "Caution coffee is hot" on the cup. To a reasonable adult, some degree of logic and judgement is assumed. You did not apply this logic and judgement, when you bought a share that is clearly not a normal share.

I ask you one simple question. Were you intentionally deceived? If not, then Caveat Emptor. The information was out there. There was no hiding the signs if you had known it was there, and if you didn't - the signs were differentiated sufficiently from normal, that a reasonable person would have stopped to check.

You sir, do have a different sense of logic and moral direction from many of the rest of us - but do not assume it's superior than the other people here. It's clearly failed you and landed you in hot water. Failure is not the mark of superior logic and moral direction.

My only concession is that the punishment for naivety this time, is disporportionate to the offence. However, being a zero sum game, someone has to pay the piper, and I'd rather it be the one who made the mistake, than anyone else.

 

[bigdog]

Re: Brisconnections shareholders - financial ruin

http://www.tradingroom.com.au/apps/qt/quote.ac?code=BCSCA

The Age reports the same:

(BCSCA) BRISCONNECTIONS UNIT TRUSTS
STAPLED SECURITY PAID TO $1.00, $2.00 UNPAID

I simulated buying BCSCA with Westpac Broking; the minimum buy is $500 or 500,000 shares and $1 million to pay!

There was no information about the $2 owing reported by Westpac Broking!

 

[rocket12]

Re: Brisconnections shareholders - financial ruin

I think you've hit the nail on the head right there. (I know I said last post, but this really gets my goat) Not that we don't have much logic or a sense of what's right and wrong, but we have a different, and I would argue, a more mature logic and sense of right and wrong.

It is "right" to make sure that kids do not have to bear the full force of their mistakes while they are learning. It is right to make sure that adults do. We have a lower set of expectations for children. For example, when a child plays on railway tracks and gets hit by a train and is injured, we claim more needs to be done to ensure safety, and we talk compensation for "failed safety systems". If an adult does the same, we say "too bad, but he knew the risks when he climbed the fence to get in".

You, presumably, are an adult, yet you want the protection of a learning child, claiming that people did not make you aware of the facts, despite the facts being freely available in many different places.

You're like the guys in America who sue because Starbucks didn't write "Caution coffee is hot" on the cup. To a reasonable adult, some degree of logic and judgement is assumed. You did not apply this logic and judgement, when you bought a share that is clearly not a normal share.

I ask you one simple question. Were you intentionally deceived? If not, then Caveat Emptor. The information was out there. There was no hiding the signs if you had known it was there, and if you didn't - the signs were differentiated sufficiently from normal, that a reasonable person would have stopped to check.

You sir, do have a different sense of logic and moral direction from many of the rest of us - but do not assume it's superior than the other people here. It's clearly failed you and landed you in hot water. Failure is not the mark of superior logic and moral direction.

My only concession is that the punishment for naivety this time, is disporportionate to the offence. However, being a zero sum game, someone has to pay the piper, and I'd rather it be the one who made the mistake, than anyone else.

Why then are we informed in plain english when buying share options online that they are options and given the expiry date? Answer is to protect people from thinking they are buying a normal share. Zero information was given on the buy page or main research pages of BCSCA. And thats why I am one of thousands who have fallen for this over the past few months.

With your logic, after this has been sorted out you would keep things the same so that the same thing can happen all over again.

Personally I am going to get out of this OK, so I'm not worried about myself but am sticking up for all the others who have bought this stock.

Seems you like analogies.....If you were waiting at boom gates and entered the train tracks after the boom gates opened and got hit by another train, I would certainly not blame you for not looking.

I make mistakes every day of my life and take full responsibility for them. But if I've been shafted by someone then thats a different story...

 

[rocket12]

Re: Brisconnections shareholders - financial ruin

http://www.tradingroom.com.au/apps/qt/quote.ac?code=BCSCA

The Age reports the same:

(BCSCA) BRISCONNECTIONS UNIT TRUSTS
STAPLED SECURITY PAID TO $1.00, $2.00 UNPAID

I simulated buying BCSCA with Westpac Broking; the minimum buy is $500 or 500,000 shares and $1 million to pay!

There was no information about the $2 owing reported by Westpac Broking!

The Age has done it well... Confused about the Westpac buy, are you saying they did mention there was $1 million to pay??

 

[cuttlefish]

Re: Brisconnections shareholders - financial ruin

I think you've hit the nail on the head right there. (I know I said last post, but this really gets my goat) Not that we don't have much logic or a sense of what's right and wrong, but we have a different, and I would argue, a more mature logic and sense of right and wrong.

It is "right" to make sure that kids do not have to bear the full force of their mistakes while they are learning. It is right to make sure that adults do. We have a lower set of expectations for children. For example, when a child plays on railway tracks and gets hit by a train and is injured, we claim more needs to be done to ensure safety, and we talk compensation for "failed safety systems". If an adult does the same, we say "too bad, but he knew the risks when he climbed the fence to get in".

You, presumably, are an adult, yet you want the protection of a learning child, claiming that people did not make you aware of the facts, despite the facts being freely available in many different places.

You're like the guys in America who sue because Starbucks didn't write "Caution coffee is hot" on the cup. To a reasonable adult, some degree of logic and judgement is assumed. You did not apply this logic and judgement, when you bought a share that is clearly not a normal share.

I ask you one simple question. Were you intentionally deceived? If not, then Caveat Emptor. The information was out there. There was no hiding the signs if you had known it was there, and if you didn't - the signs were differentiated sufficiently from normal, that a reasonable person would have stopped to check.

You sir, do have a different sense of logic and moral direction from many of the rest of us - but do not assume it's superior than the other people here. It's clearly failed you and landed you in hot water. Failure is not the mark of superior logic and moral direction.

My only concession is that the punishment for naivety this time, is disporportionate to the offence. However, being a zero sum game, someone has to pay the piper, and I'd rather it be the one who made the mistake, than anyone else.

Why do we have cooling off periods for property?
Why do we have a 'sophisiticated investor' certification?
Why do we have forms to be completed acknowledging risks and demonstrating basic knowledge before being allowed to trade high risk products like futures and options?

Because adults do require a basic level of protection.

The ASX had a choice - allow brokers to offer online trading and non-advisory discount services or not. They decided to allow it, it is of significant benefit to them because it has significantly increased the level of market participation. In offering high risk products they also have a responsibility (in my opinion) to manage the amount of risk that is able to be taken on and a responsibility (in my opinion) to provide fair warning when an excessive amount of risk is being entered into.

I disagree completely with the coffee analogy. To compare the level of commonsense required to understand the complexities of ASX stock code heiroglyphics to the commonsense required to understand that coffee is hot doesn't make sense to me.

This is more like coffee with 10,000 volts running through one side of the rim of the cup and if you happen to turn it the wrong way and drink from the wrong side you get fried. (and once you've bought the coffee you're not allowed to throw it in the bin once you realise how dangerous it is because they removed all the bins and glued the cup to your hand).

 

[rocket12]

Re: Brisconnections shareholders - financial ruin

In the Fin review code lookup
(BCSCA)
Ordinary Fully Paid

What hope have we got when the fin review don't even know what a five letter code is.

 

[rocket12]

Re: Brisconnections shareholders - financial ruin

.....

 

[bigdog]

Re: Brisconnections shareholders - financial ruin

The Age has done it well... Confused about the Westpac buy, are you saying they did mention there was $1 million to pay??

There was no information provided about the $2 owing displayed on during the buy transaction on Westpac Broking!
-- Looked like buying a normal share with three character code

 

[Sunder]

Re: Brisconnections shareholders - financial ruin

The ASX had a choice - allow brokers to offer online trading and non-advisory discount services or not.

This is more like coffee with 10,000 volts running through one side of the rim of the cup and if you happen to turn it the wrong way and drink from the wrong side you get fried. (and once you've bought the coffee you're not allowed to throw it in the bin once you realise how dangerous it is because they removed all the bins and glued the cup to your hand).

The risk is not inherent in the product. The risk created in this particular market for this particular share, due to the share price falling to such low levels, and the market for it dying.

Sticking with the coffee cup analogy, it's like saying everyone who buys take away coffee, must undergo strict training, on the possibility that one day, through a manufacturing defect, a cup might be produced that accidentally sticks to your hands, and can give you a fatal 10,000 volt shock. Don't laugh. Considering coffee cups can be made out of stryofoam, static electricity could form, and even mild static shocks to the head can disrupt brain function

The probability of the BCSCA debacle happening was small, and regulators can't regulate against everything. This is the adult/child world view I have been talking about. Our world is has gone from legislating criminal behaviour, to legislating against negligent behaviour, to legislating against personal responsibility.

We don't need it, and our world would be much worse for it.

 

[cuttlefish]

Re: Brisconnections shareholders - financial ruin

The risk is not inherent in the product. The risk created in this particular market for this particular share, due to the share price falling to such low levels, and the market for it dying.

Of course the risk was in the product. Thats like saying writing deep in the money put options is not risky because stock prices don't usually fall that much. Writing deep itm options is highly risky and you have to fill in forms and lodge margin before you are able to do so.

Regulators and the company had a *VERY* simple solution available to them to address the increasing risk of this product.

They could simply have suspended trading in the stock as the risk began to grow exponentially (Y=1/X where X=shareprice, Y=liability) and the product stopped behaving like a normal garden variety share and started to behave like a highly leveraged extremely risky futures product.

 

[RodH]

Re: Brisconnections shareholders - financial ruin

I live near the airport in brisbane, and we get a 'community update' newsletter about hte airport link / northern busway etc from brisconnections.

they interviewed the chief financial officer Nicholas Lattimore:
Why is the Brisconnections share price so undervalued?

We are extremely dissapointed with teh current security price. While current global financial market conditions are unfavourable for BrisConnections, the long-term investment opportunity that quality infrastructure presents, has not changed. In time, I am confident the market will recognise the quality and credentials of the Airport Link Motorway project and BrisConnections.

--
At that point, I was thinking - what a ********, this is getting delivered to everyone in the local community - and he's encouraging them to invest in this. But luckily the next paragraph says:

How does the installment structure work?
Basically there hvae been three installments, so after you purchase your securities you then owe two more installments. $1 is due in April 2009 and the other $1 is due in January 2010. This is indicative in our ASX code which is BCSCA, the CA means there are contributing installments to be made.

so he doesn't say it straight out(buy the minimum about of our shares and your f...ed), but gives enough information to sort of warning to what is going to happen.

I think the whole idea of a contributing installment and the way ASX and the online brokers have handled it is stupid, and needs a re-think. I also think the fact that BrisConnections - being an infrastructure company with funding from the government being a contributing asset is stupid.

 

[rocket12]

Re: Brisconnections shareholders - financial ruin

The risk is not inherent in the product. The risk created in this particular market for this particular share, due to the share price falling to such low levels, and the market for it dying.

Sticking with the coffee cup analogy, it's like saying everyone who buys take away coffee, must undergo strict training, on the possibility that one day, through a manufacturing defect, a cup might be produced that accidentally sticks to your hands, and can give you a fatal 10,000 volt shock. Don't laugh. Considering coffee cups can be made out of stryofoam, static electricity could form, and even mild static shocks to the head can disrupt brain function

The probability of the BCSCA debacle happening was small, and regulators can't regulate against everything. This is the adult/child world view I have been talking about. Our world is has gone from legislating criminal behaviour, to legislating against negligent behaviour, to legislating against personal responsibility.

We don't need it, and our world would be much worse for it.

So the financial review listing it as a fully paid share doesn't register with you?

 

[Sunder]

Re: Brisconnections shareholders - financial ruin

So the financial review listing it as a fully paid share doesn't register with you?

I didn't buy BCSCA through the Fin Review. I doubt you did either.