"The largest impediment to a buy-back of this magnitude over the balance of this year would be (I think) the 5% price rule (the buy-back price must not be more than 5% above the average of the market price, where the average is calculated over the last 5 days)"
Hi jdpc35
Thank you for your excellent post.
Yes, the ASX 5% rule may well be a major contributing factor for the slow buy back.
In the absence of any change in substantial holding notices it would appear that the selling has been from the small holders who make up around 20%.
Thus the BoD are trying to buy half of the of the small holdings (as 80% is non liquid with major holders).
And as you point out the selling from the small holders has been in relatively small volume of circa 600,000 to 1,000,000.daily. Compare that to GRR or FEX whose daily volume is generally in the millions.
Whilst small holders continue selling at the current low SP, the buyback has little chance of succeeding and the SP has little chance of going up.
MGX Price at posting:
30.5¢ Sentiment: Buy Disclosure: Held
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