Close Enhanced Share Discussion Threads

[skyship] 02/9/2008 14:04

$ strong again so INAV plummeting with severe shakeout in commodities. INAV down to 268p whilst the share price perversely is up to 212-217p. Look over-priced and a good short-term profit-taker IMO.

[skyship] 21/8/2008 15:10

INAV 284p yesterday; but the commodity bounce continues across the board, so we're up to 294p today. share price recovering to 198-204p. At 204p the GRY = 27.5%.

[skyship] 19/8/2008 17:18

Been a topsy-turvy run in the commodities over the past few days; but some late strength across the board has restored the INAV back to 280p.

[skyship] 14/8/2008 16:03

Sleepy - I ran through the exercise again just now.

The current INAV = 284p.

# If I reduce the individual commodity values by 10% - the INAV reduces by 13.4%

# If I increase the individual commodity values by 10% - the INAV increases by 13.7%

Don't know why that should be, but perhaps one of our onboard mathematicians will advise.

I suspect it is something to do with the fact that we are factoring from the here & now at 284p INAV, whereas the double gearing holds true if we were still at the original 100p.

Good to see a few buys today - lovely jubbly for the mms who bought stock down to 191p & sold it on @ up to 202p - just such easy money......

[sleepy] 13/8/2008 19:39

Skyship,

Your erudite and helpful posts are very much appreciated. However I am puzzled by your refernce in 223 to a fall of 10% in prices leading to a fall of 14% in INAV. I thought it was twice geared and that a 10% rise or fall in prices should lead to a c.20% rise or fall in INAV.

Regards,

Sleepy

[skyship] 13/8/2008 19:07

Late rise in the commodities, esp. AU @ $825 (& RISING) & Oil @ $117. INAV improved 6p to 286p. This takes the GRY to 28% & the discount to INAV up to 31%.

[skyship] 13/8/2008 10:52

Idle hands.....so tried a little exercise with CED today:

A 10% further fall across the board in the prices of our assets (Oil, AG, ALU, CU & ZN) would result in a 14% fall in the "Imputed NAV" (INAV). This would result in an INAV of 242p versus the current 281p.

The GRY at today's offer price of 196p would be 14.8%

It takes a 22% fall across all assets to reduce the INAV back to the offer price of 196p, so decided to add a few at that level - perhaps too early, but will add further on another fall.

[skyship] 12/8/2008 10:43

Today's "imputed NAV" back to 280p. share price now 197-202p. Getting closer to that "Must-have" level.....

15.45: Bt 7500 @ 200p - part of that 25k dumped @ 196p

[davebowler] 11/8/2008 16:18

Based on the values of the commodities as at 6 August 2008 and assuming these values were
to remain unchanged through to the end of the
life of the Company, the final capital entitlement per Share on the Redemption Date would be
302 pence. This is not a forecast nor is it a
reflection of the net asset value per Share and takes no account of any unforeseen
circumstances and is provided for informational purposes
only and should not be relied upon for investment decisions.

[skyship] 11/8/2008 15:19

Haven't been here for quite some time - sold out mainly due to Erstwhile's comments on the Glitnir factor!

Looking again as the share price is now back to 205-8 versus today's "imputed NAV" of 292p. That provides a "GRY" of 24.78%. May have to have a few.....

.....though would prefer an share price around the 185p/190p level to be really tempted.

[tiltonboy] 01/8/2008 09:21

Seemingly strong results from Glitnir Bank.

Discount now 28.5% after a larger fall in the share price than in the NAV. Also a bit closer to wind-up, with 1.56 years to go.

[davebowler] 21/7/2008 13:02

George Soros on Gold/Oil

[tiltonboy] 07/7/2008 15:27

dave,

It's the timeframe I don't like on CED2. If I get a result on these over the next 12 months I might well have a look if teh fundamentals are still sound.

tiltonboy

[davebowler] 07/7/2008 15:18

erstwhile/tiltonboy on that basis CED2 looks cheap.

[tiltonboy] 04/7/2008 08:45

I have taken the liberty of c & p'ing erstwhile's response to my earlier question:

CED: current share price does compensate for Glitnir risk. Default glitnir and assume a recovery of 30% - u lose about 40p or 11% of final entitlement. current share price is still 15% below this adjusted level which is ok value for the 19m to run. As we discussed, its not a zero in any traditional sense of the word as the final target is variable....in fact it's a better way to get paid for taking default risk than for taking commodity risk

Alternatively price the whole product as the final entitlement discounted @ (LIBOR+blended credit spread of MTN issuers)...which is around L+350 and you get a fair value over £3, so can't argue with owning it at 270p. Your call as to whether to hedge out embedded commodity posotion tho.


Those calculations clearly take into account the potential NAV figure at wind-up of 353p, which I think is a new high.

My thanks to erstwhile for his considered opinion.

tiltonboy

[davebowler] 30/6/2008 09:51

ALL TIME HIGH TODAY


Based on the values of the commodities as at 25 June 2008 and assuming these values were
to remain unchanged through to the end of the
life of the Company, the final capital entitlement per Share on the Redemption Date would be
331 pence. This is not a forecast nor is it a
reflection of the net asset value per Share and takes no account of any unforeseen
circumstances and is provided for informational purposes
only and should not be relied upon for investment decisions.

Commodity Start Value As at
25 June
2008
Oil $51.15 $134.55
Gold $432.85 $882.75
Aluminium $1,972.00 $3,038.50
Copper $3,367.00 $8,542.00
Zinc $1,383.00 $1,852.50
Commodity Portfolio = 100.00% 215.85%


*The End Value will be the average value of the Commodity Portfolio over the one year
period ending on 22 February 2010.

[davebowler] 23/6/2008 14:09

Discount to 'NAV' is more or less equal to the Glitnir tranche, surely.

[tiltonboy] 23/6/2008 13:09

erstwhile,

I value your opinions, and wondered what level of discount you believe is appropriate for the risk of default in the underlying note issuers on CED.

We are now sub 20 months to wind-up, and whilst I appreciate that a lot can happen in that time(and shorter).

I am still attracted to CED, but have tempered my enthusiasm following earlier comments you have made.

tia

tiltonboy

[nabcom] 23/6/2008 11:38

Precious Metals: "backed by physical metal"

Others: "backed by Commodity Contracts from either AIG Financial Products or the Royal Dutch Shell Group"

[praipus] 23/6/2008 11:11

Incisive as ever, thanks erstwhile2.

Begs the question: So what is the counterparty situation with ETF's?

[davebowler] 23/6/2008 10:25

I think that the Board/Close Brothers have done the correct thing in bringing to our attention that they have considered the risk and believe they will be accountable if they are mistaken.

[praipus] 23/6/2008 10:18

davebowler/erstwhile2, is CED2 any safer than CED from a counterparty point of view?