News Round Up

New report on tax changes out, Barramundi off to a flyer, ING closes $600 mill fund.

Monday, October 30th 2006, 6:30AM

The Finance and Expenditure Select Committee has released its second report on the proposed tax changes to pooled international investments.

It says, as Good Returns reported last week, that it will invite certain individuals and organisations to make submissions on the fair dividend rate method being proposed.

“While we were able to speak generally with submitters about the proposed fair dividend rate of return method for taxing offshore share investments, we noted the caution shown by some submitters—that while a fair dividend rate method was preferable to a capital gains tax approach, until they saw the details of the fair dividend rate proposal they were reluctant to unilaterally support it.

The report also included an issues paper, prepared by IRD officials, which shows how FDR would work. The issues paper, which is part of the select committee report, can be read here.

Barramundi off to a flyer

Fisher Funds' listed Australian investment trust, Barramundi has a stunning market debut for a listed investment trust.

First the offer was oversubscribed by $26 million, secondly the shares and warrants have been trading at around 20% higher than the issue price.

Since listing the shares have been as high as $1 and the attached warrants at 19.5 cents.

The initial offering was for $50 million with the ability to accept oversubscriptions of up to $100 million. However, the offer "closed significantly oversubscribed" with applications totalling $126 million.

The strong demand came from retail investors, including Kingfish share holders and warrant holders. Applications were consequently scaled.

Applications from Kingfish shareholders and warrant holders will be accepted in full up to 10,000 shares with the amount above 10,000 scaled by 50%.

ING closes a big fund
ING recently closed its $600 million Diversified Yield Fund to new investments, saying that it was “approaching optimal size”.

“Exceeding a certain size makes it difficult for the investment manager to continue to source investments that provide returns consistent with the targeted objective.

Continuing to receive money in these circumstances risks diluting returns to existing investors,” it says.

It was closed to new investors earlier this year and now current investors are unable to make lump sum, or new regular investments.

However, existing investors making regular contributions via direct debit may continue to do so. They may not increase either the size of existing regular contributions or the frequency of contributions.

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