email sent to jp morgan who cover cer

Just sent the below email to JP Morgan.

They are only 1 of 2 analysts that cover CER at present. They havent released a research report on CER for the last 3 months.

As CER does not have a PR department........... I decided to start up a PR department for CER, free of charge.

Hopefully in light of improving internal and external conditions for CER, they may update their recommendation on CER.

Anyway I had nothing to lose by sending the below email.

Cheers




Dear JP Morgan,

Please forward to this email to the analyst who covers Centro Retail.

I refer to your current hold recommendation on Centro Retail (CER) with a target price of 10c.

Will you be looking at releasing another research report on CER in light of the following comments:

I note the AUD/USD is now at 0.80, which means a significant writeback in FX equity derivative losses at 30 june 2009.

Also the trust has been successful in selling sufficient CSF properties at a slight discount to enable profits from CSF to be distributed from the CSF trust holding to the headstock. It has also sold 3 further assets in the US in the last few weeks, which are detailed on the website below.

http://www.centro.com.au/Investment+Products/Centro+Retail+Trust/News+and+Reports/Announcements+and+Releases/

I also note CER will not do a capital raising principally for the reason that CER is a subsidiary of CNP and CNP does not have the financial capacity to participate in a share placement.

If there were a placement and CNP did not participate, CNP's holding of CER would be less than 50% and therefore would not be able to carry CER's equity in its books. It would instead have the market value of its investment in CER in its books.

If you remove CER's equity from CNP's books, it would further deteriorate CNP's balance sheet, making it no doubt balance sheet insolvent effectively destroying the stabilisation plan that CNP entered into with its financiers back in January.

CER is insulated from dilution risk alot more than CNP and probably more than most other REITs nothwithstanding CER's current gearing level. CER's gearing level is much lower if its JV investment in Super is excluded. CER's liability in Super only extends to the amount of equity it invested in the JV.

CER is trading at a significant discount to NTA and its going concern risk is significantly lower now as opposed to September last year when the share price was much higher.

Its non-discretionary focus in the US and Australia will further insulate it from experiencing further writedowns.

I also note the stabilisation in equity markets and the current 3 month LIBOR rate at 0.66, which will increase ICR on a look forward basis significantly.

I ask you to review your current recommendation on CER in light of the above comments.

Regards