Weekly briefs
Direct uses Dresdner, Tower share price, Tech stocks overvalued: Microsoft, Southern Cross puts out new documents.
Sunday, September 26th 1999, 12:00AM
Direct Funds Management has decided to keep its International Equity Trust open, and invest the funds with Australian-based Dresdner RCM Global Investors.
As reported earlier the company has decided to close its actively managed New Zealand equity fund.
Direct took bought the funds from Renouf Asset Management late last year and sacked Ross Asset Management as the manager of the international and New Zealand funds this year. It wanted to use Colonial First State to manage the money in the funds however those negotiations fell over.
Consequently it has decided to invest the money in a wholesale fund run by Dresdner.
The tax benefits the International Fund have (about 30c per unit) still remain attached to the trust, however have not been included in the unit price.
Direct says these benefits can be used to offset future gains as long as 49 per cent of the unitholders remain with it.
Dresdner recently acquired the funds management business of Jardine Fleming.
Tower price set
Tower Corporation, which is due to list on Tuesday, has set the issue price for its shares at 565c, 15c less than the indicative price range.
When the company launched its offer it suggested the value of the shares would be between 580c to 680c, however falling sharemarkets and subdued interest in insurance stocks have seen the actual price fall even lower.
Managing director James Boonzaier says the price was set after conducting a book-building exercise with institutions. He says the company has raised a total of $380 million.
The company is set to debut on the New Zealand and Australian stock exchanges on Tuesday.
Tech stocks overvalued - Microsoft chief
Microsoft president Steve Ballmer says he thinks technology stocks are overvalued, including the shares of his company.
"There's such an overvaluation of tech stocks it's absurd," he told a conference of the Society of American Business Editors and Writers.
New policies for Southern Cross
Health insurer Southern Cross has put out new marketing documents for several of its contracts, explaining to members that the policies may not always meet members' costs.
The new documentation comes after the Commerce Commission decided some of Southern Cross' material (and material produced by Aetna) was likely to mislead people.
Southern Cross acknowledged that in some cases its payout was "significantly less than the 80 per cent to 100 per cent of the actual costs of those operations."
As a result of that decision the two companies had to pay nearly $200,000 to policyholders.
Chief executive Roger Bowie says the new documents set out the circumstances in which Southern Cross will reimburse members.
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