a sense of pragmatism for the sector and cnp

The CNP forum certainly has a much more muted feel to it compared to the last time we expected ann as they came out of T/H. There seems to be a sense of pragmatism rather than blind optimism, which we all got caught up in last time.


For my money, the REIT sector AS A WHOLE has been hit very hard and continues to be so, and like the BG bid for Origin energy being knocked back because of the implied valuations contained within the Santos announcement, we should also view the practicalities from other REIT's.

My most recent example is that of REU (a former satellite of AFG) - now you may think this is off the CNP theme but bear with me. They have property in the EU BUT last week they announced the larger ticket sale of commercial properties (valued at c $68m) for 73% of par value - because they wished/needed to re-pay debt.

Now CNP has most of its assets in the US, but reading the AFR and other business press every day it doesn't take a rocket scientis to recgnise the US economy is weak - being made worse by the oil price spike.

So the PERCEPTION, rather than the reality is that the REIT sector is suffering, the percpetion is that there are inherently large risks involded in holding CNP and when other sales in the sector are weak it throws up cautionary defences to long-term buyers.

Equaly when you also consider the investment monies pouring into the LNG sector - where the returns are hot and (more or less guranteed atm) where would a pragmatic fund manager invest their money at the moment - in a sector that has proven inherent risk or from safer, proven growth sectors that are proving great returns.

Don't be dissappointed to see the SP rise marginally on the ann and then bob backwards and forwards to its natural and risky level - probably early 40's.

I hope for everyone's sake on this forum who has committed theselevs to the share that the SP does rocket - unfortunately pragmatism says to me there are less risky investments elsewhere. But I will watch with strong interest
tomorrow to see whether the potential rewards outweigh the risks - equally I do not wish to fall prey to the manipulators like last time.

Long-term I think CNP does have value - and is it tradeable tomorrow - yes I think it is but the sell button for me will be ready to go very very quickly, as REIT sentiment is not positive atm - and for a trade to work buyers need to be seen - but where will they come from - probably other traders. Do you want to play a game of musical chairs and be the one left holding CNP shares at the top of its cycle tomorrow.

Pragmatism says great caution should be excercised.