October 14, 2010
Southern Cross Equities’ Charlie Aitken ... sold on Fortescue. Illustration: John Shakespeare
While Sydney's Anglicans have been bemoaning their recent poor investment choices, the Catholics have been out celebrating. Catholic Super on Tuesday night was among the 10 nominees for the SuperRatings fund of the year. The financial services group missed out on the top prize to CareSuper.
But the Melbourne-based Catholic Super still appears a lot chirpier than its competition following its recent merger with the National Catholic Superannuation Fund.
''After the turbulent times in investment markets over the last two years, it's a great relief that investment outcomes for 2009-10 are positive for all of our investment options,'' said the chief executive of Catholic Super, Frank Pegan, in a recent newsletter to his members.
Advertisement: Story continues below The Catholics have seen the value of their $3.7 billion of investments take a dent in the financial crisis. But not as badly as the industry benchmark. Nor as bad as the Sydney Anglicans, whose archbishop, Peter Jensen, warned at a meeting this week that his outfit was still having cash-flow problems.
''We have 'lazy assets'. We need them to get out of bed and start performing for us. Our major task in the next decade is to preserve the assets while growing the cash flow. And, humanly speaking, that is going to require prayerfulness, skill, wisdom, patience and self-control,'' Jensen told the Sydney Synod on Monday.
The Glebe Administration Board saw its assets more than halve in value to less than $300 million during the recent financial crisis.
It seems the Church of England in Sydney is in dire need of a Mary MacKillop-inspired miracle. Or even a Pope and Archbishop of Canterbury-brokered merger.
HOLY ORDERS
But it has not been all pestilence and red ink at the Protestant end of the financial sector. Uniting Church Super saw its Australian share fund rebound 13 per cent last financial year. ''The year ended 30 June 2010 has brought welcome relief from the turbulence of the investment markets in the previous two years,'' it said in its annual report.
Lutheran Super has had a soft year in its Australian share fund, after riding last year's rally to make a 36 per cent gain in 2009. However, the Lutherans are still down over the past three years.
Plans, meanwhile, are still afoot to resurrect the Seventh Day Adventist-founded ACF Investments, with the church having already agreed to provide a $4 million ''liquidity facility'' once a deed of company arrangement is executed.
The outfit has been in the hands of administrators PPB for two years.
In an interview on InFocus Church News in November 2008, the Adventist Church president Barry Oliver said: ''I guess particularly Rodney [Brady, the Adventist chief financial officer] and myself have spent a lot of time praying together, praying for our people, praying for those affected and talking about how the Church can respond in a situation such as this.'' ACF Investments, set up to fund the Adventist-affiliated Avondale College, suffered a $10 million hit from investing in three real estate funds managed by the Gordon Fell-founded Rubicon.
LOVE-IN
NAB is not waiting for a dollar parity party to bring its Sydney and Melbourne trading floors closer together. About 60 NAB traders converged on the State Theatre on Market Street yesterday for one of the biggest bonding sessions seen since the dollar was floated in the early 1980s.
Rather than catch up on the Russian Ballet's upcoming tour of The Nutcracker, which will play at the theatre, the NAB traders were treated to several David Brent (aka The Office)-sounding briefings aimed to boost morale. The presentations aimed to boost teamwork were accompanied by a presentation on ''how to work in a positive environment''.
Fortunately, the bank did allow its traders to bond the more traditional way by booking out the beer drinking-friendly Ventuno Pizzeria in Walsh Bay afterwards.
BULL'S ROAR
One of Fortescue Metal Group's most vocal cheerleaders, the Southern Cross Equities director Charlie Aitken, has made one of his boldest calls yet on the iron ore miner and has again appealed to the nationalistic tendencies of investors.
''This is a great Australian success story against huge odds [breaking an oligopoly] and in the face of tremendous investor and analyst scepticism,'' said Aitken about Fortescue in a note yesterday, where he was even more bullish than the Southern Cross analyst Fleur Grose.
Grose put a $8 a share 12-month price target on the stock, which closed at $6.30 yesterday, but Aitken said: ''And just to keep the dream alive for those of us who dare to dream, our 'all goes right' valuation for FMG as a 355 mtpa [million tonnes per annum] producer at a long-term iron ore price of $100 [per tonne] is $23 a share.''
Aitken, who in the note reminded his clients that Fortescue boss Andrew Forrest was one of his ''personal friends'', did not appear concerned by the miner needing to pay arguably one of the biggest break-fees in corporate history. A massive $US650 million ($658 million) premium to face value repurchase of its notes as part of a debt refinancing.
The concerns Aitken held for Australia several months ago - when the debate on the mining tax was in full swing - also appear to have abated. ''Go entrepreneurialism, go capitalism, go growth, go Australia,'' Aitken said in his latest note. In May, Aitken had expressed his grave fears for Australia.
''I am watching Australia being de-rated before my eyes. It's a disgrace, it is avoidable, but it's happening. It's like watching a bus crash, but a bus crash which I had a premonition of, yet, in which I am a passenger,'' he said.
ON THE RISE
Aitken's upbeat commentary was only matched by Fortescue, which released its annual report late yesterday. Fortescue disclosed its executive director, Russell Scrimshaw, had a tidy pay rise on July 1, befitting an executive working at a big miner. Aside from enjoying a $240,000 base pay rise to $950,000, Scrimshaw has also been allocated a $980,000 incentive payment this financial year. His base pay has tripled in the past three years. Shareholders are also being asked to award Scrimshaw a further 89,526 bonus shares at the upcoming annual meeting.
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