Give me nothing
2001-07-17
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AFIC
ASX Codes: afi
MELBOURNE, July 15 AAP - The chairman of Australia's largest
listed investment company Australian Foundation Investment Co said
today he had orders in to buy Telstra Corporation Ltd shares when
they dipped under the five dollar mark.
Bruce Teele, whose AFIC portfolio is valued at around $2.3
billion with investments in 120 stocks, said the company had orders
in to buy Telstra when its share price started with the figure
four.
Last Friday, the telecommunication giant weakened 14 cents to
$5.26.
"We're looking for the time to buy some more Telstra which is
pretty topical," he said.
"I don't know that there is an exact figure but certainly if it
started with (the figure) four..."
Mr Teele told Channel Nine's Business Sunday that Telstra's
immediate profit outlook is not quite as good and its expeditions
into Asia not "terribly satisfactory".
Last week Telstra warned that it would have to writedown the
value of its Asian joint ventures.
Chief executive Ziggy Switkowski said that the ventures were
performing to plan, however lower valuations would impact Telstra's
results for 2000/01.
Telstra's key Asian joint ventures are with Hong Kong based
Pacific Century Cyberworks Ltd (PCCW). Telstra has a 50 per cent
interest in internet infrastructure joint venture Reach, and a 60
per cent interest in Regional Wireless, which holds the mobile
business CSL.
AFIC holds just over $100 million in Telstra shares.
"How do we account for the huge downward movement in Telstra -
it is not quite 50 per cent but it is very significant," Mr Teele
said.
"Their expeditions into Asia haven't been terribly satisfactory
but it is a huge reduction in market price so I believe that there
are other companies of this ilk already starting to show up in the
market."
AFIC's largest holding is with National Australia Bank Ltd with
almost $220 million in stock.
There was speculation last week, following UK Competitions
Commission decision to stop Lloyds TSB from taking over Abbey
National, that NAB would make a bid for Abbey.
Mr Teele said he would be in favour of NAB making a purchase in
the UK but not at the top of the cycle.
"If they can't find something that is good value and in the
right part of the cycle then perhaps the alternative is to give the
money back to the shareholders," Mr Teele said.
"The directors and the management are charged with the
responsibility of running the business and if they see business
opportunities they need to go for them, if they can't then I agree,
give the money back."
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