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Franklin flip-flops

Friday 14th April 2000

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In an apparent change of heart US investment giant Franklin Resources has splashed out on a 5% stake in Telecom, worth $823 million at Wednesday's closing price.

In recent months Franklin, in company with other overseas institutions, has been selling down its New Zealand holdings. It has cut stakes in Fletcher Challenge stocks, Brierley Investments and Air New Zealand.

The group could not be reached for comment but it is possible at least some of the money realised from the sales has been reinvested in Telecom.

The 5% threshold, which triggers a requirement to file a substantial security holder notice, was breached on Wednesday.

ABN Amro analyst Jeremy Simpson said he was not privy to Franklin's reasoning "but there appears to be increased interest in New Zealand and in Telecom in particular. It's been doing a lot of roadshows overseas."

Another US investor, Brandes Investment Partners of San Diego, disclosed a 5.2% Telecom holding in January. Late last month it lifted the stake to 6.2%.

Telecom's share price has been falling heavily in recent days in response to the decline of the technology-heavy US Nasdaq index.

Franklin this week sold a further 1% of Brierley, reducing its stake to 4.43%. Camerlin Group, the vehicle of Malaysian tycoon Quek Leng Chan, lifted its BIL holding from 20% to 24.4%.

- Nick Stride

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