meet the analyst who crunched a giant

You have to ask why the sudden change of heart.

Anthony Klan | November 13, 2008
Article from: The Australian

SANJAY Magotra is the financial analyst at the centre of an extraordinary sharemarket stoush that has sent infrastructure group Asciano on a $720million roller-coaster ride.

Shares in Asciano plunged to record lows following publication of a report by Mr Magotra, which recommended investors sell the stock and downgraded the rail and port company's target share price from $6.08 to just82c.

Mr Magotra, who lives in Randwick, in Sydney's eastern suburbs, heads Citigroup's infrastructure research and has more than 10 years' experience working as a market analyst.

His employer, financial giant Citigroup, yesterday strongly backed its analyst, standing by his controversial report.

Other share market players were not so sure and bought into Asciano's shares, recovering Tuesday's losses by the transport and infrastructure giant.

Citigroup head of equity research Bruce Rolph said yesterday: "Sanjay is one of our very experienced analysts who has been covering infrastructure for close to a decade. We are not talking about some young upstart; the guy is one of the most experienced infrastructure analysts in the country. We stand by the integrity of the research."

Asciano shares plummeted more than 60 per cent to a record low of 63.5c on Tuesday after Mr Magotra downgraded his target price for Asciano stock and placed a "sell" recommendation on the stock.

In the 18 months Mr Magotra has been covering the company, he has on 20 separate occasions recommended investors buy the stock, with the latest buy recommendation issued on September 8 with a target price of $6.08.

Although Mr Magotra commands a healthy salary - anything from $150,000 to $1 million, according to rival analysts - for providing the market with share advice, he declined to comment on his controversial report yesterday.

"At this stage I probably won't make any comment," Mr Magotra told The Australian yesterday.

Citigroup spokeswoman Judy Hitchen said Mr Magotra would prefer to "keep a low profile at the moment".

"He's a shy and retiring guy and, while I'm sure it would make great colour, I'm pretty sure he's going to stick to his report and not say anything," Ms Hitchen said.

"He's had a big enough splash today to scare him off the media for the nextyear."

Asciano clawed back all Tuesday's losses yesterday - in spite of Citigroup publishing a second report supporting Mr Magotra's analysis - as other analysts rallied behind the transport giant and Asciano reassured investors about its position. After Asciano shares were suspended from trade on Tuesday, company chairman Tim Poole reassured investors - spooked that the company was unable to raise funds - it was "well advanced" with fundraising proposals and it was not considering an equity rasing.

Of seven analysts covering Asciano, Mr Magotra is currently the only broker issuing a "sell" recommendation, with a target price for the stock of82c.

Target prices set by other analysts range between $3.70, set by UBS, and a target of $5.45, set by Morgan Stanley.

Mr Magotra's 20 reports issuing "buy" recommendations proposed numerous target prices for the stock ranging from $13.79 in June last year to his second-last report, a buy recommendation with a target price of $6.08 issued on September 8.

Asciando owns Australia's biggest and most important rail and ports operations in the form of Pacific National and Patrick Ports.