AFF Member Stock Discussion

[TheRealTMA]

The futures for Monday are saying down,down like those Coles prices.

Buy buy buy

 

[Ansett Nostalgic]

Mrscove is pretty annoyed that Bankwest (a business name of CBA) is dumping business accounts. They renamed our joint account to a retirement account without telling us anything. It looks like she will have to request temporary limits to handle business payments for investments, shire rates, land taxes and stuff like that.
Fifty plus years and CBA don’t care.
The only two banks we have not trimmed are Judo and Macquarie.
We have heaps in the banks hybrid capital notes to avoid taking a haircut on the major banks dropping back to what they are really worth.
The only non bank hybrid capital note we hold is Challenger CGFPD as if they go bust it will tear lots of retirement dreams apart. Their latest result reported this week was ok.
We did get about 59% of our Goodman bid at $33.50 thru Bell Potter.

What sort of returns are you getting on the capital notes?

 

[cove]

The CBAPM gets you 7.10 for a capital note that costs 105.40 at the moment and the note matures in June 2030 at $100.00. They pay quarterly with 30% tax taken out.We use Commsec at just under 0.1% brokerage. In our superfund we get that 30% tax refunded but that may not apply to you.
So it is better than a CBA term deposit but in a financial wipeout you have capital in the bank which ranks behind a term deposit which is an unsecured creditor so the risk is higher.
The effective yield is around 6% when a CBA term deposit gets you a bit over 4%. The best bit is you can get your funds back in 2 days if you find you need the funds.
Now the authorities want to get rid of bank hybrids totally by 2032.

 

[cove]

The only hybrid non bank that we have is CGFPD which runs at $7.70 at the moment and have just gone ex entitlement to their quarterly. May be able to get some in the $103 range this week. It runs to May,2029 and Challenger’s profit announcement last week was ok profit wise. Their growth was slower than the market expected.
We used to have IAG hybrids but insurance tends to have bad news once a decade. Banks have tended to have problems every twenty to thirty years in the past.
Hybrid prices tend to reset as they go ex dividend distribution so you get them at a lower purchase price.
With CBAPD they go exentitlement next month if you want them at a lower entry price.