Capital raising set to become popular in 2009

As a shareholder are you feeling generous towards the companies you have in your portfolio?

Whether you are or not you may have to make a choice to chase what could be good money after bad in 2009.

The dearth of cash and credit available from normal sources-like banks-to keep businesses running, especially during the current recession, is undoubtedly going to lead to some New Zealand listed companies putting out their caps to shareholders to enable them to keep trading over the difficult times to come.

There will be some capital raising through; debt raising via bond issues, rights/cash issues and or private placements with big institutions.

Usually the domain of start up companies and especially popular during the tech bubble of the late 1990s, the terms for rights issues and other forms of capital raising was relaxed by the NZX on November 26 2008 as an answer to the credit crunch.

Both rights issues and private placements dilute existing shareholders shareholdings and of course extra debt laden onto company balance sheets through alternative methods of capital raising will impact somewhere down the line.

I would favour a rights issue or private placement myself.

I could speculate here and name a few names that might be ready to pass the begging bowl around-I am not going to-but we can be fairly sure that any company with high to medium borrowings set to mature soon and without sufficient sales and or assets to allow themselves the ability to borrow off a bank is going to have to go to shareholders with the bowl.

Of course the length of time the recession plays out will mean more companies will need to avail themselves of shareholder cash or other methods of capital raising.

There is no guarantee of course that shareholders would be willing, or able, to take a further risk by contributing their hard-earned cash and this shareholder will certainly be wanting the bargain of the century before he plunks down further cash towards any company in the Share Investor Portfolio.

The million dollar question remains though and is a more than likely scenario. What happens if the cash isn't forthcoming?

Short of a mysterious benefactor, one of those struggling investment banks or an angel investor ready to take a big slice of the company, the answer is of course bankruptcy.

Time to get out the checkbook?


Recent Share Investor reading

Long vs Short: The Warehouse Group
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Share Investor's 2009 stock picks

Shareinvestorforum.com - Discuss this topic

Related links

NZX release on capital raising relaxation (PDF)


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c Share Investor 2009

"Rag Heads" unite in hatred of the West.

The Muslim "celebration" of Ashoura where paritipants beat their self inflicted wounds.

As bad as the current war on terror is that the Israelis are fighting in the Gaza strip, what worries me more are the violent protests around the world by the mad as hell Muslims and their deluded sympathizers.

The mad leading the blind ignorant.

We in the West seem to put up with this sort of shite because it is their democratic right to be offensive and law breaking just because Israelis are standing up for themselves in their land against an oppressive, murderous bunch of knuckle draggers who want to see you wiped from the face of the earth.

Its a bizarre state of affairs to see the head of the Mad Muslims in Britain expect an apology from Prince Harry for calling a friend a "rag head" and fail to even whisper a word against his compatriots in Gaza when they purposefully kill innocent Israelis, and a few thousand Americans die on Sept 11, 2001 because of a hatred of things American and criticism of it seems as scarce as a Muslim with a penchant to eat pork with a Jewish mate.

This whole sorry state of affairs is best encapsulated in the best seller from Mark Steyn, American Alone: The End of the World as We Know it. 

This following excerpt from his book is a good conclusion to this post:

But you never know: It might be that we're the plankton. "Our enemies are small worms," Adolf Hitler told his generals in August 1939. "I saw them at Munich." In Europe today, as in the thirties, the political class prostrates itself before an insatiable force that barely acknowledges the latest surrender before moving on to the next invented grievance.

Indeed, a formal enemy is all but superfluous to requirements. Bomb us, and we agonize over the "root causes." Decapitate us, and our politicians rush to the nearest mosque to declare that "Islam is a religion of peace." Issue bloodcurdling calls at Friday prayers to kill all the Jews and infidels, and we fret that it may cause a backlash against Muslims. Behead sodomites and mutilate female genitalia, and gay groups and feminist groups can't wait to march alongside you denouncing Bush and Blair. Murder a schoolful of children, and our scholars explain that to the "vast majority" of Muslims "jihad" is a harmless concept meaning "healthy-lifestyle low-fat granola bar." Thus the lopsided valse macabre of our times: the more the Islamists step on our toes, the more we waltz them gaily round the room.

I will be posting more excerpts from his book as the madness in the Middle East and in the "Muslim World" globally continues.

It is worth a read in the light of the latest Muslim attacks.

Related Amazon reading

America Alone: The End of the World As We Know It by Mark Steyn  Buy new: $11.53 / Used from: $9.54 Usually ships in 24 hours

c Political Animal & Mark Steyn 2009

Long vs Short: The Warehouse Group

In this third installment of the Long vs Short series I am once again going to take look at the chart comparisons for a stock from the Share Investor Portfolio and compare the 10 year return (above) to the turmoil of the last year with a 1 year return chart (bottom of post).

In this series I want to show the merits of investing, using charts, for the long-term vs short term gains or losses. I will use the longest available data to me for the long-term view and will compare against the NZX50.

My Portfolio
Symbol	Price	Value	Earned
WHS.NZ	$3.63	$29040	$-11760
You own 8000 [WHS.NZ] shares purchased at $5.10 [$40800]

The third stock in the series will be The Warehouse Ltd [WHS.NZ] which I have held in this particular portfolio for 16 months, so the returns will clearly not be as good as the longer term companies in my portfolio and will mirror more closely the one year chart (see bottom of post) rather than the 10 year one, which shows a healthy 270% return.

After dividends and tax credits are taken into consideration, my 16 month return is minus 25% ( see small chart above)pretty much the same as the one year return indicated in the chart below and par for the course considering the current market depression.

The long-term hold proposition wins again with the 270% or annualised 27% return beating any other stock in my portfolio.

Shame I haven't held it for 10 years though.





Long vs Short series

Mainfreight Ltd
Sky City Entertainment


The Warehouse Group @ Share Investor

Warehouse bidders ready to lay money down
The Warehouse set to cut lose "extra" impediment
The Warehouse sale could hinge on "Extra" decision
The case for The Warehouse without a buyer
Foodstuffs take their foot off the gas
Woolworths seek leave to appeal to Supreme Court
Warehouse appeal decision imminent
Warehouse decision a loser for all
Warehouse Court of appeal decision in Commerce Commission's favour
MARKETWATCH: The Warehouse
The Warehouse takeover saga continues
Why did you buy that stock? [The Warehouse]
History of Warehouse takeover players suggest a long winding road
Court of Appeal delays Warehouse bid
The Warehouse set for turbulent 2008
The Warehouse Court of Appeal case lay in "Extras" hands
WHS Court of Appeal case could be dismissed next week
Commerce Commission impacts on the Warehouse bottom line
The Warehouse in play
Outcomes of Commerce Commission decision
The fight for control begins soon

Share Investor Forum-Discuss this topic


Related Links

The Warehouse Financial Data

• Summary
• Charts
• Dividends
• News
• Announcements
• Price History
• Related Securities

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The Standard & Poor's Guide to Long-term Investing: 7 Keys to Building Wealth by Joseph Tigue
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c Share Investor 2009

Pro murder protestors blinded by ignorance and hatred for the West

While rockets from mad Muslim Palestinians target innocent Israelis in schools, buses and their homes, ignorant fools such as John Minto and Keith Locke from the Green Party protest to support this sort of in discriminant killing and terrorist acts by picking on an innocent Israeli, Shahar Peer, a participant in the 2009 ASB Tennis Classic in Auckland, New Zealand.

If these haters of the Western way of life detest our culture so much and are willing to support mad Palestinian child killers then let me be the first to tell them to fuck-off and go and join their mad Muslim comrades in the Gaza Strip.

These people are dangerous, they don't fit in here and are ignorant of the facts of what has happened in the Middle East in the past and what is happening currently.

Similar protests worldwide wallow in similar ignorance and are blinded by their hatred for the West and all it stands for.

Shahar Peer lost her match against Russian top-seed Elena Dementieva and the rent a crowd shouting crap from outside Stanley Street certainly didn't help her case.

They wanted Shahar to withdraw from the tournament.

She will be back next year so good on her for standing up to the senseless bullying.

Shahar Peer in action today at Stanley St, against world number 4, Elena Dementieva.

c Political Animal 2009