Image for Misguided enthusiasm at The Ex

Staff at Launceston’s Examiner must have been bored out of their skin on Good Friday, with no paper to read and no new material to turn into a pulp mill advertorial.

With the paper’s favourite job creation project looking as illusory as ever, it seems any hint of good news for Gunns warrants an immediate, and positive public airing.

So when a couple of ASX releases found their way to the Editor’s desk on Friday, it was clearly time to throw good journalism out the window, and give the pulp mill a quick spruik in the online edition of the paper.

``Major Banks Back Gunns’’ read the headline. (On TT: HERE) The story went on to claim shares in the company `soared’ 6 per cent after National Australia Bank and Macquarie Bank announced substantial shareholder notices.  There was also the claim Unisuper increased its stake in the company to 7.99 per cent ``last week.’‘

Wrong, wrong and wrong.

There were so many errors in the story, I emailed the editor, suggesting they might like to scrap it and start again, which they dutifully did (surprisingly - the Examiner chaps don’t like Jarvis much).

First, the share price did nothing after the Macquarie announcement, as it was released to the ASX at 4.34pm, well after the market closed.

The National Australia Bank release hit the screen at 2.01pm, at which time Gunns were trading at 55.5 cents.  As they closed at 55, it would have been more accurate for The Examiner to report ``Gunns shares softened after NAB announcement.’’ 

Greg wouldn’t have liked that.

Second, nothing in the Macquarie release gives me the impression the bank is looking at Gunns as anything other than a toy for short-selling.

Like some other institutions that pop up on the registry from time to time, Macquarie clearly sees the direction of the share price - spiralling towards nothing. 

In short, a perfect stock for shorting; not so good for adding to growth portfolios.

Next, NAB isn’t buying shares on its own account.  The majority are held either by subsidiary MLC, or by individuals and corporates using NAB’s trustees services.  Although given NAB’s hapless record of corporate investment, perhaps it’s appropriate they are taking an interest in Gunns.

At least they can’t lose as much as they did when they gave a blank cheque book to currency trading guru Dave Bullen a few years ago.

And I’m still not sure why bearded academic types are bleating and wringing their hands over the claim UniSuper has bought 8 per cent of Gunns (On TT HERE)

The announcement a week ago was to fix a clerical oversight - UniSuper’s exposure to Gunns has been stable for some time; they haven’t suddenly jumped in and bought a stack of woodchipping shares.

Like most industry funds, UniSuper outsources funds management, and some of those dollars find their way to Macquarie and NAB.  So there’s a bit of double counting going on.  Concord Capital holds a chunk of stock on behalf of UniSuper, which has already been notified to the ASX by parent company Invesco.  Rather than carry on about why UniSuper should own Gunns shares, perhaps those really concerned should take enough interest in their super to establish who is really managing their money.

My comments may be dismissed by some as the work of a pedant, but I don’t care.  The Examiner story was wrong on every count, despite the journalist ringing at least one financial adviser (probably to try to get a quote about whether the announcements meant the mill was going ahead.)

If such a simple story can be so obviously a work of fiction, how can we have any expectation that Joe Public is getting factual, responsible news about a range of issues, not just The Examiner’s pulp mill?