here we go again ! pre open ?, page-31

RNF,

Fair question. I'm not sure it has an easy explanation given that its all about assumptions but I'll try. Please forgive me if I state the obvious.

Firstly I reckon that there are probably three primary conclusions that most people could or would have reached about the relevance of the future issuance of the ML upon the SP. These 3 obviously exclude the more imaginative abstract positions put forward by some of our more colourful posters who see education levels, Hitler, and sino realty as somehow central to thinking on issues CDU related, no matter what the question. The three that I put forward are:

a) Market already thinks its a done deal
b) Market thinks its likely but not willing to pay a premium to its issued
c) Market still doesn't believe it and will be surprised

The opinion that I put forward in that statement indicates that I'm believe that most in the market are sitting between (a) and (b) within not that many sitting at (c).

Don't get me wrong, there will always be some people in each category but any movement of the SP based on the issuance of the ML would be driven by those in categories (b) and (c) only. As I believe that majority of the market is between (a) and (b) this infers that the announcement is already anticipated and priced in to a large extent.

You might quite rightly ask why I assume that the majority are between (a) and (b). The answer in part can be draw using HC chatter as an indicator. Chatter herein on HC indicates a general lack of concern about whether the ML will come through and even the negative nellies seem to have dropped the lack of a current ML from their argument which infers to me that even the most one eyed detractors now believe its in the bag. HC being a reasonably representative microcosim of the investor community this leads me to believe that market see the ML not as a matter of "if" but rather "when".

Given that it appears to be almost universally recognised that the ML is a matter of process now and probably only weeks away, anybody who considered that such event would add to the company value would surely have factored that into their share price expectations by now, being buying or selling. If you know something to be a done deal you don't wait to see it in writing before factoring it in. This is particularly the case in more speculative stocks.

Don't get me wrong, the announcement which notifies us of the issuance of the ML might still result in some improved sentiment because there will be at least some in category (b) and (c) who will have no choice but to look at CDU differently but price movement will be based on how many of these people where really are to start with. As stated in my post I do suspect that brokers will start to move their clients into CDU shortly and the ML might be the catalyst to explain their change of tune.

I'm not saying that the issuance of the ML isn't significant but I don't think that we should expect to see the stock suddenly fully valued just because of this event. If the brokers do decide to use this event to explain their turnaround in attitude then this event could be the beginning of a turnaround in the SP.

I'm not expecting the announcement to have any immediate and dramatic impact but rather it could be a slow burn.