Long Term View: Westpac Banking Group Ltd

In this series of posts I am going to be looking at stocks listed on the NZX in relation to their returns to shareholders over the life of their listing -what shareholders would now see in their back pockets if they had invested in the company IPO. The calculation of returns includes dividends and tax credits.

Westpac Banking Group Ltd [WBC.NZX] has been a stellar investment for shareholders since its 1970 listing* on the ASX at $AU 2 per share and 1992 listing on the NZX at an adjusted $NZ 6.50. With $AU15.62c in net dividends (see NZX chart above and ASX chart here ) and numerous share splits, bonus issues, rights issues,share buybacks capital raisings and ; a 1:5 bonus issue in 1970 ,1:4 bonus issue in 1973 and 1977, a 1:4 rights issue in 1985 and 1988, a 5% share buyback and numerous capital raisings ** in 1996 gives WBC an 1970% return (see chart below for the share price percentage gain against the average of all NZX indexes - does not include dividends, tax credits and the share split in its calculation) and over the nearly 40 year listing of WBC an annual net return of 49.25 %***!.


* We will look at the full history for this Australian stock that listed in 1970 on the ASX and December 1992 for a New Zealand listing on the NZX.

**Estimated dilution of 90% for shareholders.

*** For holders of New Zealand listed shares the annual return has been just over 28 % since available data based on a 1992 share price of NZ$6.50, AU$9.48 in net dividends, 30% in tax credits and a 5% share buyback in 1996. This compares to a 7.22% return from the average of all NZX indexes.

! This compares to a 51.21% return for ANZ Bank over 41 years.



Long Term View Series

Auckland International Airport
Air New Zealand
AMP Ltd
ANZ Banking Group Ltd
Briscoe Group Ltd
Cavalier Corporation Ltd
Comvita Ltd
Contact Energy Ltd
Delegats Group Ltd
EBOS Group Ltd
Fletcher Building Ltd
Fisher & Paykel Appliances
Fisher & Paykel Healthcare
Freightways Ltd
Goodman Fielder Ltd
Hallenstein Glasson Holdings Ltd
Hellaby Holdings Ltd
Infratil Ltd
Kirkcaldie & Stains Ltd
Kiwi Income Property Trust Ltd
Mainfreight Ltd
Michael Hill International Ltd
Metlifecare Ltd
Methven Ltd
Mowbray Collectables Ltd
NZ Oil & Gas Ltd
New Zealand Refining Ltd
New Zealand Stock Exchange Ltd
Nuplex Industries Ltd
PGG Wrightson Ltd
Port Of Tauranga Ltd
Postie Plus Group Ltd
Pumpkin Patch Ltd
Restaurant Brands Ltd
Ryman Healthcare Ltd
Sanford Ltd
Sealegs Corp Ltd
Scott Technology Ltd
Skellerup Ltd
Sky City Entertainment Group Ltd
Sky Network Television Ltd
Smiths City Group Ltd
Steel & Tube Ltd
Telecom NZ Ltd
Telstra Corp Ltd
Tourism Holdings Ltd
Trustpower Ltd
Turners Auctions Ltd
Turners & Growers Ltd
The Warehouse Group Ltd
Vector Ltd
Wakefield Health Ltd

Westpac Banking Group Ltd @ Share Investor

Discuss WBC @ Share Investor Forum
Download WBC Company Reports


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NZ Superfund: Performance & Investment Detail

Source: TV One Q & A, August 29, 2010.

A really interesting interview with Paul Holmes interviewing Adrian Orr, head of the New Zealand Superannuation Fund (NZSF) and what he thinks about the NZ and global economy and where it might be headed.

He briefly outlines the investment profile and goals of the NZSF and gives his view on what makes a good investment for the long-term.

I don't agree on the Government or rather taxpayer funding our retirements but be that as it may returns have been pitiful since the funds inception in 2003. An annual return of 5.39% before tax is what kiwis have to look forward to.

Yes, it is a long term 20 year investment horizon but after 7 years we have lost money on this escapade - we have invested on borrowed money.

Investments in the NZSF are spread across the world, including New Zealand, from equities to bonds to foreign exchange.

Find out more about the NZSF

Full list of Equities
Returns to June 30 2010
NZSF Statement of Intent
NZSF 2009 Annual Report


Related Share Investor Reading

Compulsory Super fails on all fronts
Kiwisaver: A mediocre substitute for real saving
But wait there’s more: How I’m learning to love Kiwisaver



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c Share Investor 2010

Allan Hubbard: Ignorant Supporters Blissfully Unaware

The support from individuals for Allan Hubbard and his failing financial and personal empire in the facing of damning disclosure in the latest Grant Thornton Report is either blind loyalty or extreme ignorance.

Groups on Facebook like Paul Carruther's (see Paul's racist comments to me)Help Allan Hubbard and Leave Allan Hubbard Alone seem to be embroiled in some sort of conspiracy that someone is "out to get him" and have a practiced mantra that there is no evidence of Mr Hubbard's wrong doings, so why go after him?

Well, if you read the Thornton Report you will come to a different conclusion. It points out Hubbard's financial misdemeanors in plain, clear English. There is more detail to come on this but because of the complex nature of his business; the inter-party lending and inadequate bookkeeping, it may take many more months for this sorry saga to unfold.

What is also clear is that the Serious Fraud Office is investigating him and his businesses and the South Canturbury Finance Company that he used to head is close to collapse at the risk of $1.5 billion of taxpayer money due to a Government Guarantee put in place by the outgoing Labour Government in late 2008.

Much of the support Hubbard has received has waned in the face of the Thornton Report but the very small core group left behind are adamant that Mr Hubbard has done nothing wrong.

This kind of ignorance is the kind that got investors putting money into the finance company sector in the first place, including Allan Hubbard's various companies. Those people didn't do their homework, were greedy for higher returns and took big risks and have or will lose money as a result of that ignorance.

These people want you and me to bail out their ignorant backsides!

It is time to face the reality that Mr Hubbard has been found out and while he is not as bad as most of the fraudsters who have taken investors money and run, the outcome of his business dealings have had the same effect on people.

Many investors have lost their life savings and a desperate for help.

As a supporter of Hubbard, putting your head somewhere where you feel better about him and yourself isn't going to make the situation any better.

Face the music, if you don't your blinding ignorance will lead us back down the same path sometime in the future.

That is unacceptable to us all.

Related Share Investor Reading

Download Grant Thornton Report 1
Download Grant Thornton Report 2

Market Alert: South Canterbury Finance to be placed in receivership
Thornton Report 2: Allan Hubbard Guilty as Charged
Allan Hubbard: Full TV3 Interview - July 16 2010
Thornton Report: Allan Hubbard's Aorangi Securities
Whatever happened to? Muriel Dunn
Bothered by Simon Botherway
Allied Farmers: Prosecutions should be on the cards
Allied Farmers Fraud passes with little fanfare
Allied Farmers: What's it Worth?
Hanover, Allied Farmers deal more of the same
Jane Diplock Q & A Interview
Hanover's "White Knights" are really daylight robbers
Hanover collapse: It was just a matter of time
Money Managers Saga: 3 Story wrap
Money Managers gives First Step investors the middle finger
Greed is bad: Geneva Finance Folds
Financial 101: Learn before you leap
Kevin's Blog


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Allan Hubbard Guilty as Charged

In the ongoing saga of Allan Hubbard and his crumbling business empire there were further revelations yesterday when the second report from statutory managers Grant Thornton came out.

It appears that Mr Hubbard has been running his Hubbard Management Funds (HMF) business, Aorangi Securities and a number of other investment vehicles in a slack, fraudulent and underhanded manner. In those respects it makes him as bad as your Hotchins, Watsons, Bryers and their filthy thieving ilk.

On first look though, what appears different is that Hubbard looks to have been motivated by the "Robin Hood" factor. That is, he was using other peoples money to lend to those who "needed" it.

All very altruistic sounding at first glance but bound to end in tears when incoming funds and assets didn't match outgoings.

There have been claims made in the second report that Aorangi Securities has been borrowing money on call while lending the proceeds to second rate and overvalued farming assets, the bulk of which are connected to the Hubbards - nothing altruistic going on there.

Aorangi made interest free loans to a charitable trust that the Hubbards have a financial investment in and that trust was being charged 10% interest on those loans - very dodgy.

Investment values overstated by 25% in the Hubbard Management Funds business with $13 million of assets allocated to investors in the fund that apparently don't exist - looking very bad here.

An overstatement of cash at hand at HMF of more than $5.5 million.

Inter-party lending that advantages Mr Hubbard and his financial interests over his investors is a good indication that he was covering his own ass in the event of a meltdown.

Mr Hubbard's businesses all suffered from a lack of full detailed documentation.

It is clear now while Mr Hubbard did not set out to deliberately fleece investors as other finance company heads have over the last 3 years, Mr Hubbard is no saint.

I have until now largely reserved my judgement on Hubbard and his predicament but if you read the report you can come only to the conclusion that Hubbard has been a naughty boy and supporters need to take a good hard look at themselves if they wish to continue to back Mr Hubbard in the face of the reality of his offenses thus far revealed.

Yep, it isn't right that the other thieves out there have largely been untouched by authorities but the object of our interest here is Allan Hubbard and we now should wait for the additional detail that will come out from the Serious Fraud Office and the Statutory managers of Hubbard's business and personal financial dealings.


Related Share Investor Reading

Download Grant Thornton Report 1
Download Grant Thornton Report 2

Allan Hubbard: Full TV3 Interview - July 16 2010
Thornton Report: Allan Hubbard's Aorangi Securities
Whatever happened to? Muriel Dunn
Bothered by Simon Botherway
Allied Farmers: Prosecutions should be on the cards
Allied Farmers Fraud passes with little fanfare
Allied Farmers: What's it Worth?
Hanover, Allied Farmers deal more of the same
Jane Diplock Q & A Interview
Hanover's "White Knights" are really daylight robbers
Hanover collapse: It was just a matter of time
Money Managers Saga: 3 Story wrap
Money Managers gives First Step investors the middle finger
Greed is bad: Geneva Finance Folds
Financial 101: Learn before you leap
Kevin's Blog


Discuss this topic @ Share Investor Forum - Register free


From Fishpond.co.nz



Buy Bird on a Wire: The Inside Story from a Straight Talking CEO & more @ Fishpond.co.nz




c Share Investor 2010