Great term deposit with no capital garantee, nor fixed return rate;Bought sub $30 and happy with 6% + fully franked dividend.
Great term deposit with no capital garantee, nor fixed return rate;
might buy the same at $25 in a fortnight if I feel like gambling.
Sorry Nicksnot personal, but are the return worth the risks?
Leverage (aka banks) works both way and for a country in recession....
Great term deposit with no capital garantee, nor fixed return rate;
might buy the same at $25 in a fortnight if I feel like gambling.
Sorry Nicksnot personal, but are the return worth the risks?
Leverage (aka banks) works both way and for a country in recession....
Who else has money being poured into them, every week, recession or not?
Aside from banks, consumer staples, realestate and energy is my guess.
But, thanks to 9% mandatory minimum super and default "balanced" funds, every week 9% of the nations wage productivity goes to the super funds who invest 60% of that into "blue chip stocks", i.e. ~5.4% of the nations wage productivity is being poured into ASX listed companies regardless of whether they perform well, or poorly, over or under valued.
Default options would also include international shares, infrastructure, property and alternative allocations such as private equity and hedge funds and small caps in their growth asset exposure. I'd imagine it's the industry funds, not the retail, that get the majority of those inflows though. Could be wrong, interested to find out.
Do the industry funds invest directly, or use default master trust funds?
Thereby reducing their responsibility and accountability, for outcomes?
Capital raising is a big discount to the SP.
Is this common?
http://www.smh.com.au/business/banking-and-finance/westpac-to-raise-35bn-cash-profit-up-3-per-cent-20151013-gk8f8q.html
Here's a laymen question regarding capital raising...why can't the bank just use its profits to shore up the balance sheet? Why do they need to dilute shareholders value by raising equity? I understand that some profit will go out as divies...
CanOz
Yes it's one of the ironies of the market. They can certainly skip a dividend payment or two to have the same impact on their balance sheet. Yet they'd never do it. I guess they are worried about the market's reaction if they ever cut dividend... but giving money out on one hand while asking for money on the other, does nothing more than paying handsome fees to the brokers and underwriters.
Bank execs have remuneration agreements that are heavily tilted towards Total Shareholder Return (TSR) over a set period, which obviously includes dividends. As a double whammy, cutting or stopping dividends, will probably hinder the share price performance, further reducing TSR for that period.Thanks SKC, so i guess its the ole "Because they can..."
Here's a laymen question regarding capital raising...why can't the bank just use its profits to shore up the balance sheet? Why do they need to dilute shareholders value by raising equity? I understand that some profit will go out as divies...
CanOz
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