Brambles wants to harvest Hays

Brambles chief executive Sir CK Chow and finance man David Turner are sharpening their pencils as they prepare to pore over the document management business that UK conglomerate Hays Group recently put on the market.

As a winning bid effectively will cement control of document management in England, Brambles's Recall division is expected to face keen competition from US rival Iron Mountain.

Brambles believes it can fund an acquisition of up to ##100 million ($261 million), although some analysts are sceptical whether the balance sheet can comfortably support that sort of spending.

The Hays business has been valued at as much as ##170 million. But this could be a lofty figure, as it is rumoured that the Hays division has lost up to four of its top five clients recently to Iron Mountain.

Hunter Hall's a dish

It's hard to find a fund manager who's not treated a little warily in these days of volatile sharemarkets.

Imagine the surprise then when a flick through the latest Fat Prophets newsletter revealed a bullish piece of research on Hunter Hall International, parent of Hunter Hall Investment Management. Analysts Angus Geddes and Jason McIntosh awarded it the coveted title of ``speciality dish" as a growth company with a very attractive business model.

After listing at $1.35 a couple of years ago, Hunter Hall hit a peak of $7.50 last May but has since dropped back to half that level.

Fat Prophets believes that while further falls may occur as sharemarket volatility continues, the outlook further down the track looks good.

``Hunter Hall qualifies [as a speciality dish] because of an excellent track record of high investment returns achieved over the past decade through a value based philosophy."

Funds under management sit at around $500 million, with returns of about 20 per cent over the past eight years.

The interim results to December 31 didn't look too brilliant down 30 per cent on the previous corresponding period. But the Prophets are more interested in how the composition of the $1.6 million profit has changed. Core earnings excluding performance fees and other income was $1.8 million, a 363 per cent improvement on last year.

While the company may still look a little expensive on current earnings, Fat Prophets believes Hunter Hall is a good bet for the long term.

The shares were unchanged at $3.60 yesterday.

Virgin Blue edge

There's no disguising that the Federal Government's decision to retain the $10-a-ticket Ansett levy isn't the greatest thing to happen to domestic tourism. Certainly the airlines made their displeasure clear.

But, if there is consolation for Virgin Blue it is probably that the budget carrier is less inconvenienced than Qantas.

After all, scrapping the levy would be equivalent to a fare reduction, which has a tendency to boost volumes.

Unfortunately for Virgin, it isn't in a position to cater for a surge in demand. It has had to scrap some expansion plans while it awaits delivery of new generation Boeing 737 aircraft.

At the same time, the carrier is preparing to make its pitch next week for the corporate travel market, with the launch in Brisbane of the Blue Room lounge. With all that happening, it would be better for Virgin if the Government gets around to scrapping the levy between August and November, by which time some of these shiny new planes should have rolled on to the tarmac.

Qantas, on the other hand, could easily bring as much extra capacity as it likes to bear on the domestic market.

Watch the oil prices

A little snippet from ABN Amro Morgan's director of strategy and economics, Michael Knox.

Knox thinks the war will be over in three months and everyone should keep an eye on oil prices, down roughly $6 a barrel since February.

As the price of oil falls, so the drop in confidence and business expectations will be reversed. That, combined with April traditionally being a good month for the Aussie sharemarket and the Gulf war of 1991 proving a good time to buy, means investors should be at least thinking about buying. Brave words indeed.

Trust in property

Takeover activity and increasing global uncertainty continue to boost the overall performance of listed property trusts.

Deutsche Bank ranks the diversified sector as the best performer of the six sub-sectors.

The 6.7 per cent return was underpinned by strength in AMP Diversified Trust, boosted by Stockland Trust Group's acquisition of a 15 per cent stake.

Also helping the sector was Deutsche Diversified, which does not have co-ownership agreements that are designed to protect property rights of joint owners but can deter bidders.

The next best performers were the retail trusts, which returned 5.7 per cent.Impressive results, given the uncertainty about equity markets, but the bank warned clients to err on the side of caution.

Takeover speculation had distorted true prices and money flows.