376 matchprice, page-39

t3 at $4.13 (costello) Being touted by Peter Costello today.
Tell him he is dreaming. Who is going to buy at $3.80 let alone $4.13???



Telstra at $4.13 'ambitious'
From: AAP
December 15, 2005

THE Federal Government has set an ambitious target price after it said it was now calculating expected proceeds from the sale of the third tranche of Telstra at $4.13 per share, analysts said.

The Government today said the new target was a more realistic price than the $5.25 per share price previously mentioned in budget papers.

"It is still in my opinion an ambitious price," independent telecommunications analyst Paul Budde said.

"Based on my comparisons of similar telcos overseas, the price is between $3.70 and $3.80."

Mr Budde said Telstra's (tls.ASX:Quote,News) public stoush with the Government over regulatory issues will likely continue to damage the company's share price.

"The fact that Telstra is going to fight the various regulatory systems means quite a lot of negative news over the foreseeable future, which will make investors nervous rather than optimistic," he said.

"If you are more confident about your future, then investors are also, but if you are showing despair and blame it on regulation, then obviously you send out a negative message to shareholders."

The new price was based on a 90-day average of trading in Telstra shares to December 8.

Treasurer Peter Costello said the Government had decided to take a 90-day average to calculated the new price.

Telstra spokesman Rod Bruem declined to comment.

"This is a matter for the government," he said.

CMC markets senior dealer James Foulsham said the $4.13 valuation was more realistic than the previous target set by the Government.

"It is a pretty big reduction from that they had said before," said Mr Foulsham.

"So they are getting more realistic about what they can actually get for it."

He said Telstra's share price has been largely on the decline since the end of July.

"They are going to have to do something to turn the company around if they want to get that kind of price for it," he said.

"Based on the trading that we have seen over the past few months, it has just been going one way, and that is down."

The regulatory debate over the next 12 months will continue to bruise the share price, he said.

"Obviously a lot of it depends on what comes out in the next six months to a year and it is difficult to put a valuation on the stock until you know exactly what these factors are going to be, because they can have a significant effect on Telstra's profitability."

Telstra was trading at $3.81 at 1401 AEDT, giving it a market value of about $23 billion.