04/12/2001 - 21:00

Interest rates on the agenda again

04/12/2001 - 21:00


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THE expected 25 basis point drop in interest rates by the Reserve bank at its scheduled meeting on Tuesday continued the downward trend in rates.

THE expected 25 basis point drop in interest rates by the Reserve bank at its scheduled meeting on Tuesday continued the downward trend in rates. The general consensus from 21 market economists polled this week by Reuters favoured a quarter percentage point easing, which would take the official cash rate to a 30-year low at 4.25 per cent.

This is grabbing the Australian market’s attention at present, with further easing expected to give the economy a push in the new year. Internationally, the bankruptcy filing of US energy giant Enron, the unrest in the Middle East and renewed signs that Argentina is close to financial collapse overrode positive economic data out of the US to leave stocks on Wall Street lower.

“The economy is not out of the woods,” Citibank-Salomon Smith Barney economist Ms Melanie Jani said. “However, a recovery next year remains very likely given fading imbalances in the business sector, substantial monetary and fiscal stimulus already in the pipeline, and lower energy costs.”

The shockwaves from Enron have extended across global markets, hitting banking shares in Australia. Commonwealth Bank has come off a couple of dollars recently, as has ANZ, which is now in good long-term value territory at around $17.20.

Commonwealth Bank is due to go ex-dividend mid to late February 2002 and is forecast to pay around 62 cents per share. The share price at present is $28.38 and compares favourably with NAB at $31.25, which next goes ex-dividend around early June 2002.

Stratatel Limited

Perth-based independent telco manager Stratatel Limited has been listed on the Australian Stock Exchange since early December 2000. The company floated at 25 cents per share and has reached a high of 30 cents, having been as low as 10 cents in the past 12 months. Stratatel Ltd acts as an intermediary between customers, suppliers and carriers and sources most of its client base from Government instrumentalities. The State Government accounts for a significant part of Stratatel’s revenue at present.

Stratatel’s WA client list includes LandCorp, ERG, DOLA, Alinta Gas, The City Of Bayswater and the Disability Services Commission. The company is looking to expand this client base by east coast expansion, opening recently offices in Sydney and Melbourne.

Managing director Mike Fairclough said future growth was on the east coast.

“We’ve had extraordinary levels of interest from the Government in New South Wales and Victoria ” he said.

MobileFleet is a comprehensive product concerning cost control, asset management and reporting services designed to manage a mobile phone fleet. MobileFleet enables a client to search down into individual users within a company, displaying the handset and accessories held by the employees as well as their spending patterns and uses, and it also offers the client the option to set budgets for each individual user. As part of the total package, Stratatel will liaise with carriers to negotiate call rates and monitor contract expiry dates and renewals. Stratatel also will audit bills to ensure negotiated rates are adhered to. Stratatel provides large organisations a specialised intermediary, independent of the organisation, to structure a plan that suits the company and its employees.

This is particularly attractive to large organisations, as they don’t usually have the time or specialised skills for mobile administration.

Stratatel has 34,250,000 million shares on issue, which capitalises it at $5.9 million at current share price levels of 17.5 cents. The register is particularly tight, with about 80 per cent of the company held within the top 20 shareholders.


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