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Keeping track of your shares

How to stay on top of your share portfolio

Page reading time: 6 minutes

Monitor how your shares are performing compared to similar companies or the market overall.

Stay up-to-date with company, economic and market changes. This gives you a better chance of acting quickly to take advantage of opportunities or avoid losses.

Set alerts to track share performance

Economic and market changes can impact a company's earnings. Share prices can change as new information is released to the market.

It pays to check the price of your shares regularly. How well your portfolio performs depends on selling decisions as much as buying decisions.

Stay up-to-date by subscribing to alerts from:

Tracking your shares closely also helps you avoid investment scams or company director fraud.

Read annual reports and company updates

Shareholders receive annual reports or company updates. These are useful sources of information about company performance.

Pay particular attention to announcements about takeovers or changes of strategy, as these could impact share price.

See choosing shares to buy for tips on what to look for.

Consider takeover bids carefully

In a takeover, one company makes an offer to take control of another company. They try to buy enough shares to run meetings and decide who gets elected as directors.

If you own shares in the target company, the takeover company could offer you cash, shares or a combination of these.

The offer could be a takeover bid, a scheme of arrangement or a backdoor listing (reverse takeover).

Takeover bid

Once the bid is announced, you get a written offer to buy your shares within two months. You will receive a:

  • bidder's statement — who the bidder is, what it does, what it will do if the takeover is successful, how much it is offering for your shares
  • target company's statement — usually recommends whether to accept or reject the offer, and why

Wait until you've received both statements, review them, then decide whether to accept or decline the offer.

If you accept, you sell your shares directly to the bidder and do not pay a brokerage fee. You get the cash and/or shares within 21 days of bid closure.

If you decline, you generally do not have to sell your shares to the bidder. But if the bidder gets 90% or more of the company, it could compulsorily acquire them under bid terms.

Things can move quickly during a takeover, so watch for updates. The offer price may go up or the bid period could be extended. Changes in the share price may also indicate whether the market thinks a takeover will succeed.

Scheme of arrangement

Within a few months of the announcement, you will receive a scheme booklet from the company you hold shares in. It will include:

  • who is acquiring your shares, and how much you will get
  • if offering shares in the company buying your shares, what both companies will look like when merged

The booklet may also include an independent expert report, giving an unbiased assessment of the offer. This explains the pros and cons, whether the scheme is 'fair and reasonable', and what are the implications if the scheme goes ahead or not.

Review the scheme booklet, and consider if it's in your best interests. Then decide whether to vote for or against. You can vote in person at the scheme meeting or send in your proxy form.

You get to vote on the offer, and the company acquires your shares if shareholders accept the scheme. The scheme goes through an approval process before you get the cash and/or shares.

Backdoor listing

In a backdoor listing (reverse takeover), a listed company acquires an unlisted company in exchange for cash and/or shares. The listed company may have few assets or be no longer viable.

The takeover allows the unlisted company to become listed without an initial public offering (IPO). The listed company can re-emerge as a new business and work towards creating value for shareholders.

A backdoor listing may take longer and cost more than an IPO, and be more difficult to understand. Share trading is suspended while the process takes place. Some shareholders may not be able to sell shares within 12 to 24 months of the takeover.

As a shareholder in the unlisted company, you get cash and/or shares in the listed company in exchange for your shares.

As a shareholder in the listed company, you may benefit from an increase in value of your shares. Or your interest in the company could be diluted as more shares are issued.

Get advice if you need it

If there's anything you're unsure about or don't understand in the takeover offer, talk to a broker, accountant or financial adviser before you decide.

Track your dividends

Share dividends are distributed to shareholders from company profits, usually twice a year. The size of the dividend depends on how the company performs. Sometimes you don't receive any dividends.

Some types of companies pay more dividends than others. For example, financial companies typically pay more than mining companies.

Keep a record of transactions

Hang on to your transaction statements. Like any income, you have to include dividends on your tax return. You can also find details of dividends per share on the company website or the ASX.

Claim franking credits

A 'franking credit' is your share of the tax a company has paid on profits you receive as a dividend. This is also known as an imputation credit. It means you get a credit on your tax return. If your top tax rate is less than the company's tax rate, the Australian Taxation Office refunds you the difference.

Reinvest what you can afford

A company may offer you more shares instead of a cash dividend, sometimes at a discounted price. This is known as a dividend reinvestment plan, and still counts as income on your tax return.

Before you take up the offer, think about what you want from your shares. Do you want regular income or capital growth? Consider using your dividends to invest in different shares or other assets to diversify and spread your investment risk.

Keep your holding statements

When you buy or sell shares in a company, you will receive a holding statement. Keep these as proof of ownership and for tax purposes. You need this paperwork to work out capital gains tax.

Identify red flags

If you're concerned about any of your investments, try these company safety checks on ASIC Connect:

Or check the list of companies you should not deal with.

Talk to a broker, accountant or financial adviser if you need professional advice.

Man sitting on stool holding tablet.

Pablo keeps on top of his shares

Pablo reads the business and financial news daily. He sees an article about medical research results from a company in which he has shares. In the article, the managing director says this major piece of research has not achieved the results they expected.

After doing more reading and checking his watch list, Pablo determines the company's prospects have declined. He decides to sell the shares.