Investing Money

Friday 15th September 2000

Investors hang up on telcos

Telecom is not the only telecommunications company out of favour with investors. Listed market minnows Newcall Group and e-Phone have both seen the value of their shares punished this year. Newcall has lost more than 50% in the past four months while e-Phone has done the same since the beginning of April. Losses from major players in the same period Telecom (28%) and Telstra (13%) appear moderate by comparison. Those hoping for a rebound may have to wait a while judging by an article in the latest Fortune magazine. Entitled "Telecom [munications], what a wreck!" it says margins are low in the face of increasing competition and "the industry is probably going to get worse before it gets better."

Brierley fancies US dollars

Brierley Investments' proposed share restructuring calls for a change of the currency denomination of its shares from New Zealand dollars to US greenbacks. This would give the company an authorised capital of 10 billion shares with a face value of 10USc each. If this is approved by shareholders, the company proposes to cancel half its shares, giving it five billion shares of 20USc each. If the deal goes through, local investors can expect the price of 37c to double to 74c. But this doesn't alter the market capitalisation of the company which will remain at about $1 billion, a long way short of its peak market value many years ago that was several times higher.

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