Australia | Sep 28 2006
By Rudi Filapek-Vandyck
Have we been too critical on Deutsche Bank’s turncoat action which saw the broker changing its recommendation for Telstra (TLS) to Buy fifteen days ago today?
We’re more than happy to leave the conclusion-drawing to our readers in the light of the media leakage that Deutsche Bank is about to sign a contract with the Future Fund to provide it with assistance in managing the Future Fund’s prospective $14.7bn stake in Australia’s largest telco.
According to Australian media, Deutsche Bank will advise on how to manage the Future Fund’s 4bn Telstra shares that will remain in escrow until November 2008. Question number one is, of course, what is there to assist if these shares cannot be sold for another 24 months from now?
The same media reported this morning that Deutsche Bank has been awarded “preferred advisor” by the Future Fund after a number of banks were invited to participate in what is usually described as a “beauty contest”. Apparently Deutsche Bank showed more muscle (flesh? brains?) than the others.
It is believed this will put Deutsche Bank in the box seat later to grab the role of lead manager when the Future Fund decides, on Deutsche Bank’s advice, to sell part or all of its Telstra shares.
Only three out of the ten leading experts that are covered on a daily basis rate Telstra shares positively. Apart from Deutsche Bank, this includes Credit Suisse (Outperform) and Aspect Huntley (Accumulate).
Merrill Lynch and Smith Barney Citigroup rate the shares Sell. GSJB Were is still the odd one out being part of the core group of three global coordinators of the T3 sale while rating the stock Underperform/LT Hold.
The rest are Neutral.
See also True Or False: Telstra Is A Buy (13/09/2006) and Where Are We On Telstra? (20/09/2006).