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Thoughts on interest rates and Symbio Holdings (SYM)

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    Thoughts on interest rates and Symbio Holdings (SYM)

    Thanks for your ongoing commentary... I read plenty of analysis (as well as yours on Friday) that compares the current cash rate to that of the 90's as relatively irrelevant, but my concern is that that is only a nominal comparison. The fact that most businesses and "mum's and dad's" tend to borrow close to their maximum capacity at whatever the available rate is at the time can actually mean MORE problems than in the 90's are going to develop soon due to the percentage increase of the servicing required with the current and expected rate increases today. Am I missing something? Also, Symbio Holdings (SYM) has continued to drift lower...do you have a current view on it? Thanks in anticipation...

    Answer

    Hi Anthony,

    Unfortunately, we are concerned like yourselves that mortgage stress is likely to get far worse in 2023 as a significant number of fixed home loans switch over to variable fortunately at this stage full employment will cushion the blow. With less spare cash we are likely to see a significant contraction in discretionary spending until we find a new equilibrium i.e. not great news for the likes of retail, cafes & restaurants.

    Integrated telco business Symbio Holdings (SYM) has seen its share price fall over 50%, from $7.50 to $3 in less than 12 months. We believe this Sydney-based $262mn business is starting to show some value around $3 but it’s not one for us until the shares show signs of stemming their decline.

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    Symbio Holdings (SYM)
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