Apples, as you know i favour cer over cnp as i mentioned in...

Apples, as you know i favour cer over cnp as i mentioned in earlier posts that i hold 90% cer shares and 10%cnp shares which now might consider dumping the 10% cnp and just topping up with "My Baby CER" as well as some other stocks which i hold long term.Now the reason why i favour cer over our big brother cnp is quite simple.

Firstly i think most of us here understand that cer is a listed property trust which either owns the malls outright or co-invests with cnp or thru the managed funds which are the syndicates, thus enabling cnp to be the Responsibly Entity.... i.e. a provider of management,leasing and development.

Now the question of cnp and the R.E status.

A question was raised via the cer webcast on centro website (Centro Retail Trust Annual Results 29 August 2008) The question being what does cer look like with out cnp and question goes on asking does cnp have to exist for cer to maintain it’s lending outside Super LLC.

Answer>> Glen Ruffrano responded by saying that firstly cnp is the R.E (responsible entity) of cer and as the R.E if it does not exist(the term he doesn't like to use) it just means another R.E comes in.So cer continues with another R.E that will run the business or it can choose to run the business as a self advised trust if it so chooses.;so there’s no direct relationship with centro and cer having to go away says Glenn.

The comment made by Glenn was mentioned here quite a number of times, but this info is mainly for the new ones who enter the forum and go thru the threads for the first time and don't understand the super llc joint venture between cnp, cer and mcs 40 but i'm not saying you are a newbie as you have been a cnp holder for quite sometime.

So my thoughts are as follows:

Now the latest announcement in principle mentioning some form of dilution for cnp but we still don't know the full contents as yet and also a mention of no possible dividend stream for quite sometime, one must ask the question is there any value left for cnp shareholders in the medium to long term.

For me "Personally" i can't see this happening; as much has changed from late last year to current meaning that i'm after value and a possibly dividend stream moving forward.I'm concerned that cnp might be looked at as another mining stock hence daytraders playing around with it "Like A Piece Of Meat" and no fund managers,institutional investors and c.o buying the stock and pushing the price up over the longer term. If u don't get any of the bigger boys investing into this as well as the value investors then the stock will remain stagnant for quite a while.

Unless conditions change dramatically and asset revals are marked up then my main concern is the remaining equity left in the glass for cnp shareholders which is 69 cents can potentially be wiped out this year leaving cnp holders with nothing but this is just a worse case scenario and this is one of the methods i adopt when taking a position as a part owner in a company and when you compare this type of approach and apply the same principles to cer then one must say we have a considerable buffer i.e. n.t.a related slightly better gearing but still needs to be within the preferred lvr range and this is possible once the market cycle turns and also cer has a straight forward balance sheet that isn't to confusing in comparison to cnp.

Now even though we'll see a decline of around 2-5% for u.s malls and a bigger hit on the Australian malls maybe a bit more at around the 10% range, for the six months ending 31 December 2008 this is still enough for cer to be valued at around 80 cents to $1 in the short term imo i.e. using my margin of safety.

Longer term though is where the value is,once the global situation changes and slowly moves into the other direction and examples of the turn around might be to keep your eyes on unemployment rates especially non farm numbers on the first friday of every month in the u.s,gdp numbers and better than forecast earnings in u.s related stocks that might offer some hope to investors in world markets as Aussies like to follow the lead from wall street,which in my view needs to be changed and not so focused on the U.S and to start combining with China,India and some of these other up and coming countries and start leading the way rather than focusing on the "U.S" all the time but i guess the "Sheep commentators" here in Aus will continue with the tradition that has been going on for many years.

But at the end of the day if u feel confortable with cnp then the choice is yours but i can only give my take on things and the views of my close buddies that hold stocks and have being doing so for a long long time what their thoughts are as well.

Cheers.. and all the best with your decision making