Raven Prop P Discussion Threads

[gfrae] 05/8/2021 14:36

the Eddison note suggested the recent deal was done partly to clear the perceived overhang , it has not done that, it has simply created a new one. At least before there was the possibility that the shares might be taken over, now that possibility has been removed there is little reason for the shares or Preference shares to go up in price.
I do not think the directors have been "dodgy" either, I am sure they have obeyed the letter of every rule, but they are not acting on behalf of the majority of shareholders.

[my retirement fund] 05/8/2021 14:33

Yes, as long as the music keeps playing. At least we know there are real assets that stand behind the company, assets that are highly valuable and in greater demand than they have ever been. I mean just look at Eros bond holders, that was a bond that until recently was yielding far less than Raven and it was patently obvious its assets where overvalued, over stated, mostly worthless yet because India is not ruled by a ruthless megalomaniac, they were perceived a far lower risk!

[owenski] 05/8/2021 14:23

I think the principal perceived risk here is that it's based in Russia.

I've held these for years through sanctions and differing internal RCB interest rates, the share price has always been priced low/ yield high relative to other similar class entities. But it continues to pay out.

[king suarez] 05/8/2021 14:09

Possibly, not necessarily mutually exclusive!

[my retirement fund] 05/8/2021 14:05

I think rayg5 is just generally very confused.

[king suarez] 05/8/2021 13:47

I'll (try to) translate.

"The yield here is an extraordinary c. 11.5pc." = I'm surprised the yield is so high, what am I missing? (though it is actually 10.5%, not 11.5%).

"That's just about the same amount of capital loss required to take this back to 100. But surely there'd be a lot of demand at that level" = I can't see much downside below 100, presumably because that is 'par' value (which would in capital terms mean break-even given the dividend), so I (still) don't understand why the yield is so high.

"Yes, I know there's a lot of overhang" I am aware that there were some placing shares still to be/being sold, hence that might explain why the share price is temporarily such good value i.e not going up lately.

"but this argues for a steady price rather than any major reduction in the share price " = this bit doesn't make any particular logical sense to me

"Comments?" = can someone please provide a persuasive argument that justifies the current risk/reward/pricing in the share, please i.e I am thinking of buying in, but am wary that I have missed some risk factor(s) that account for the current low share price.

[my retirement fund] 05/8/2021 13:01

Yes I would like to comment on your your comment in so much as what an earth are you actually saying. You're post makes literally no sense, it may as well be written in Chinese. I've absolutely no idea if you are making a point, an observation or what. Prehaps you may like to sit down and rewrite your posts again, then it may be a little easier to reply to.

[rayg5] 05/8/2021 12:04

The yield here is an extraordinary c. 11.5pc. That's just about the same amount of capital loss required to take this back to 100. But surely there'd be a lot of demand at that level. Yes, I know there's a lot of overhang but this argues for a steady price rather than any major reduction in the share price Comments?

[zangdook] 25/7/2021 15:22

and those who buy those shares, at these lower levels, may then sell as the price eventually starts to recover once the placees have dumped their stock. So the recovery when it coms may be quite slow.

[kenny] 25/7/2021 13:47

I closely track this company and do not believe there is anything “dodgy” going on (other than the directors who are extremely greedy and run the company for their benefit).

In any event, the new joint venture now holds a good slug of RAVP, therefore, the directors are hardly likely to shoot themselves in the foot.

As I have stated before, because of the massive size of the placing compared to the daily volume, the overhang could be substantial and take a long time to clear.

To demonstrate this, let’s assume that of those that received shares in the placing, a combined total of 11m shares are looking to be moved on for a quick profit. If the average daily volume in RAVP is 40,000, it would take 275 trading days to remove the overhang. That is over a year to clear the overhang and ignores other holders selling in that time period. Therefore, it could take a full 18 months to clear the overhang - when taking account of other holders who decide to sell in that time period.

All of the above figures are estimates but may not be too far from what transpires. For example, you can see some of the early selling from the change in holdings of major shareholders between the end of May and the end of June albeit that does not paint a complete picture because there were no doubt numerous parties who received lower allocations in the placing and have sold or are looking to sell, or decide to sell in the next 18 months.

[kenny] 24/7/2021 11:38

The Bank of Russia increases the key rate by 100 b.p., to 6.50% p.a.

[irish_neris] 23/7/2021 19:58

There's either something dodgy going on with this stock or something that in time is going to let it run & explode in price

[kenny] 23/7/2021 18:45

There is no set source for research but this is a recent report from CBRE Moscow - download the report from the link.



Near the end of that report, they talk of average rents reaching RUB 4,500 by year end. As they started the year at just under RUB 4,000 that is in excess of a 10% increase in the year.

The above report was published on 26 May and as the year progresses we should get updates on what is actually occurring.

[cc2014] 23/7/2021 12:47

I am sure you are right Kenny. I'm just a little surprised given how strong the rest of the prefs have been in the last month that the share price has not at worst been flat.

I also note the rouble has moved back in our direction from a few months ago.

May I ask where you source your information on Russian warehouse rents? I would like to keep a closer eye on it. Thanks.

[kenny] 23/7/2021 11:08

All of Thursday's trades were buys and yet the share price was marked down. I believe the reason was because there is still a overhang of persons who received RAVP shares in the placing and are looking to realise a quick profit.

How long this overhang will take to clear is a big unknown but it could be quite some time. It was a massive placing - in context of the average daily trading volume in RAVP. Hence, my view is that it will take a long time for all the placing shares to find firm holders albeit there has been a lot of net purchases in the last few months. Indeed, the overhang may last longer than most people's time period for holding an investment!

Meanwhile, warehouse rents in Moscow are reaching all time records. Some predictions are that rents will increase by 8% or 9% by the end of this year. That type of increase would really help the RAVP coupon to become even more secure, irrespective of the rouble's continuing weakness. Obviously, it takes time for rental increases to fully work their way into an increase in income for the whole portfolio of properties - about 4 years for this company as that is their average remaining length on current leases.

Interim results in late August or early September may reflect some management confidence - about rents and vacancies, offset by the increase in interest rates in Russia - and help to clear some, perhaps not all, of the remaining overhang.

[zangdook] 22/7/2021 17:07

It's not surprising. When there's blood on the streets, you sell assets which have somehow retained their value in order to pick up bargains.

[montyhedge] 22/7/2021 16:49

Not one buy trade today, all sells.

[kenny] 06/7/2021 12:03

The point I was indicating in post 1054 above is expanded below.

It takes 75% of preference share holders who vote, to vote to redeem RAVP; at any price. Following the placing of the Invesco holdings, Quilter Investors now holds 31.7% of the preference, so can block any redemption on their own. In my opinion, Quilter would block any lowball redemption because although they hold the ordinary class as well, by far their biggest financial investment is in the preference class: RAVP.

I also believe that it was they that insisted that the Articles be changed so that, even if the company is taken over, the stock exchange quote for RAVP will be maintained.

[cc2014] 05/7/2021 13:46

I suspect we are going to have to put up with stock rotating from weak holders who got them cheap in the Invesco placing to new stronger holders for some time yet.

The price action seems to imply a natural course of events. As the price is slowly moving up, the weak sellers let a few more go.


119p still looks great value to me. For some very odd psychological reason I actually quite like the price down here. If the share price moved to 145p I'd have to start dithering about whether to sell, which would be annoying as really they are worth 160p+

[holts] 05/7/2021 13:18

It seems simply the unpredictable Putin is the barrier , just suddenly coming up with edicts that come from nowhere , the latest nonsense with Champagne illustrates in a very minor bu5 adequate way the problem .

[igbertsponk] 05/7/2021 09:59

Think they've only lost the Russia bit on the quoted company.
The trading operations sensibly retain it.

[zangdook] 05/7/2021 09:48

I see we've tactfully forgotten to tell them we changed our name.