Monday, June 20, 2011

Share Price Alert: ASB Preference Shares - A & B Class

ASBPA 1 Year Chart

With interest rates on the rise for lending and investing because of impending inflation and a flight to less risky cash investments like bank term investments the stocks ASB Capital No 1 Ltd [ASBPA.NZX] (1 year chart above)and ASB Capital No 2 Ltd [ASBPB.NZX](1 year chart below) might be worth a second glance.

These stocks offered by the ASB Bank basically mirror what the company offers for term investments plus an additional margin for taking a slight risk on any possible capital losses through sharemarket fluctuations.

These two stocks have both been punished in terms of capital losses with term investment rates basically below the current inflation rate when tax is removed with the "A" shares dipping below 70c in 2009 and the "B" shares below 60c in 2009 and trading at 66c in late March.

ASBPB 1 Year Chart

Both stocks were issued at a $1.00 face value 9 and 8 years ago and also carry imputation credits that make them even more attractive than term investments.

Over the last month or so a"A" shares have piled on 7c or 10% to currently trade 77c and "B" class shares up 8c or 12% to be currently trading at 75c.

These shares look set to approach their face value over the following year as interest rates rise and will probably breach their face value as they did when they were first issued and interest rates were high.

No time for patience here, get in while they are cheap.

Disc I own ASBPB shares in the Share Investor Portfolio

Share Price Alert Series

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ASB Bank Pref Shares A @ Share Investor

Long Term View: ASB Capital Preference Shares (A)

Discuss ASBPA @ Share Investor Forum

ASB Bank Pref Shares B @ Share Investor

Long Term View: ASB Capital Preference Shares (B)

Discuss ASBPB @ Share Investor Forum

ASB Bank @ Share Investor

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c Share Investor 2011

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