National Australia Bank Real Estate Investment Prospects
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A presentation on an investment opportunity for National Australia Bank in 2009
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National Australia Bank Real Estate Investment Prospects
- 1. Tai Tran Victoria Sze Giang Tran Hong Nguyen Susie Huang Huy Truong Dylan Taylor Fay Eric 24/8/2009 Public Version
- 2. One Opportunity Two Alternatives Private Public Equity Placement
- 4. Investment Industry Opportunities Risks โข $100m โข Real Estate in โข Expected return: โข Global crisis โข Make a decision: Eastern Coast 12% (base case) โข Low to medium Public Equity or โข Agricultural โข Diversify portfolio liquidity Private Placement purpose: Farms and risks โข Interest risk โข Extend influence over the industry โข Penetrate unsaturated market โข Cheap labour
- 5. Public Private Equity Placement Strategic Partner
- 7. โข Real estate requires high level of expertise Expertise โข Timing is everything PRIVATE PLACEMENT Advantages 1. Macquarie is โข Avoid information experienced in real New leakage estate investment โข Need to expand Market networks 2. Private placement is time-saving 3. Confidentiality is ensured โข Base scenario: within 4 4. Enter complex Time months contracts Frame
- 8. Australian Real Estate Index ๏ก A 72% fall from peak ๏ก Projection: hit bottom on January 2010 ๏ก Take advantage of cheap price ๏ก Tale advantage of cheap labour
- 9. โข Falling short behind in PRIVATE PLACEMENT Financial Current Ratio, EBIT position Advantages 1. Less risky 2. Would not affect current share price โข Dilution to total equity 3. Risk separation Concentration capital = 0.68% 4. Negotiable discount of 5. Less requirement of Shareholding regulatory compliance 6. Cost-saving & time- saving โข Corporate governance Regulatory โข Corporate Act Disadvantages 1. Dilution of Compliance โข Regulation on financial shareholding is limited institution
- 10. CBA WBC ANZ NAB ROE 18.33% 19.52 12.3% 13.8% CURRENT RATIO 1.48 1.48 1.27 1.27 EBIT INTEREST COVERAGE 0.29 0.24 0.18 0.11 D/E 0.44 0.44 0.54 0.47 EPS 3.48 2.06 1.7 2.62 P/E 13.68 13.66 11.62 10.21
- 11. โข Bounce back in Recovery 2010 Forecast PRIVATE PLACEMENT Advantages โข Individual 1. Institutional partner Global Crisis investors refrain with strong financial from investing background 2. Stimulus package given to large company โข For large Government companies Stimulus
- 13. Category โขInvestment Financial Returns Value โข$100m Long- Utilize โขReal Estate Diversi- Macquarie Industry โขAgricultural purpose fication term expertise Values & network โขPrivate Placement Finance โขPartner: Macquarie Group Take โขBase 4 months advantage Time โขBackup plans: 2 of the Plan months & 6 months downturn