Gov floats have been historically good for shareholders. CBA, TLS, Aurizon. Ok.. Maybe not TLS but it is coming good for long term holders. Divies excellent over that period.
CBA
Total Shareholder Return (avg annual rate)
1
1yr
3yr
5yr
10yr
2
10.6%
24.2%
15.2%
15.8%
TLS
1yr
3yr
5yr
10yr
1
13.0%
29.3%
19.5%
9.8%
AZJ
Total Shareholder Return (avg annual rate)
1
1yr
3yr
5yr
10yr
2
-1.2%
14.6%
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I think it's always been in the gov's interest to leave a lttle bit for the mums and dads. They are, after all, the people who vote.
The projected expenses appear to be a bit overdone. One of the good things about privatisation is the opportunity to cut the fat. In 12 months time there will be an announcement that 3,000 useless Medibank workers will be shown the door. Unions will jump up and so will the share price.
There will obviously be a lot of negativity associated with the float coming from analysts who want to get their shares cheaper as was the case for Aurizon. I'm not saying that there isn't some legitimate negative debate, just saying that some of it is to be discounted somewhat. I remember a panel on Sky business discussing the Aurizon float 1 week before it listed, there were about 7 of them and they all said what a bad investment it would be. They have returned 14.6%pa for the past 3 years.
It's a good sector to be in as the baby boomers approach their skeletal years and the public system cracks under pressure. Every aussie will be looking to renew their premiums and Medibank will be there ready to collect.
