Investment Matters

What Matters this week

Matt Comyn's baptism by fire as CBA's new CEO started this week.  The situation is barely tenable: huge issues being uncovered by the Royal Commission and the alleged AUSTRAC breaches occurred when he was head of the retail bank division (i.e. when he was responsible to make sure such things didn't happen).  At the CBA responsibility and accountability seem to be mutually exclusive.  And where is APRA (Australia's financial regulator) in relation to the fit and proper person test?  Oh I forgot, being a corporate puppy again.

And you can add another item to the growing list of the CEO's headaches - four large US pension funds have reportedly joined a class action being initiated against the CBA, for inadequate market disclosures regarding the alleged AUSTRAC breaches.

But Comyn isn't the only bank CEO who has headaches.  Corporate fraud has seemingly occurred right under NAB's CEO Andrew Thorburn's nose (and that of the prior CEO as well), allegedly facilitated by his now former chief-of-staff. 

Got to give it to the 99-year-old co-founder of troubled Godfreys (the vacuum retailer has been struggling to compete against more modern retailers with more modern product offerings).  He (via his investment company) made a $0.32 per share takeover bid for the company.  Last traded price pre-offer was $0.21.  The Board's response was: take the money and run.  Just kidding.  They have rightly recommended an independent valuation.

Reflecting ongoing pressures the iron ore minnows are facing, Mineral Resources plans to buy Atlas Iron in a scrip deal. Altas traded above $1.00 per share in late 2013.  The offer is around 3 cents a share, albeit an effective 59% premium to Atlas' last traded price pre-offer.

Agriculture company Elders is keeping busy, buying crop protection business Titan Ag and Kerr & Co Livestock, and selling its feedlot and processing operations in Indonesia.

The vexed listed life of surfwear retailer Billabong will cease next Monday.  This week the courts provided the final approval for the takeover of the company by US-based Boardriders (which also owns the Quicksilver brand).

Listed electronics retailer (well sort of - it has its fingers in so many pies it is hard to define what it does) Kogan, is expanding its telecommunications offering from mobile, adding NBN.  It probably won't get a huge market share, but it may add to the margin pressure the telecoms companies are already under for NBN services.

And finally, PNG based (and ASX listed) energy play Oil Search has made a significant reserves discovery.  This may underpin a further expansion of the LNG export facilities it owns in conjunction with ExxonMobil.