i can smell a rally, page-41

Ned,

I'm not sure I completely understand the question, but I'll take a stab.

Firstly, on the information we have to hand, CER will not be participating in the D2E swap which means there is no dilution for CER holders in the way there will be for CNP holders. So the banks have no real incentive on the CER price for a D2E swap. Some do still have CER holdings so on balance, they probably want the SP to rise.

Secondly, the market price for CNP is being driven by sentiment and short term trading. The group is so complex with so many interrelated issues, a few of which are still outstanding, that investors are struggling to make a valuation based on fundamentals. In this regard, the fact that CNP controls 51% of CER (through both direct and indirect holdings) is probably being overlooked by the market. However (this is where it gets a bit complicated) from memory, CNP consolidated CER into the YE accounts. This means a) the value at which CNP accounts for CER is significantly higher than the current CER SP and is not dependant on the CER SP b) any NTA figure for CNP would also include its portion of the consolidated value of the CER holding.

I'm not sure whether this has helped or not...