michaelirish update please, page-2

Thanks for inviting me back. As you know I am an investor as distinct from a trader.
As such I have been posting excessively. I have decided to cut back my posting.
Since I have posted a very favourable attitude to MIG I feel with the invitation I am bound to respond.

I hold MIG and am increasing my exposure at this time.
MIG has been dumped this week. Why , who knows?

1) There is a natural destabilising of the SP due to the perceived options of the In-specie distribution. The reasons that gave rise to an investment in MIG in the first place, long term secure income , is satisfied by SRG , and prospective income and growth is satisfied by MIG. And the good news is that ATM holders of MIG have BOTH. I am very happy with this outcome.
2) There is an inevitable tug of war between domestic investors in MIG and foreign , mainly American. The low growth profile and uselessness of the franking credits make the SRG not attractive to the foreign investor while highly desirable to investors like Investors like IML who would not touch MIG with a forty foot pole because of its Structured financing and excessive fees. The potential for growth is high in MIG’s case , but the business model, very like Cintra’s , is loaded for FUTURE returns as distinct from the IMMEDIATE . MIG’s profile will be increasingly foreign. It makes sense that MBL’s assets in the toll-road, auto category be bundled with MIG and listed on the NYSE. The extraordinary turnover in MIG’s shares yesterday reflects this tension
3) Last week’s bloodletting reminded me of the treatment of MAP after it won the contract for KSA. At the time I decided to load up on MAP and wait. MIG’s DRP SP is being decided by the VWAP of the ten trading days from last Tuesday. It is not often that there is blood on the floor. When there is, take advantage of it.
4) MIG’s business model. I don’t like it. But it is hard to complain about it now. It has been around since 1996.
(5) interest rates. It had very little to do the fall in SP.
MIG has artificial shortterm hedging in place. and long term hedging in the form of raising tolls.
(6) Petrol prices and the Mid East. Not much. If the price of oil stays high, more presure will be put on fuel efficiency and intruduction of hybrids. The infrastructure is there to be used and public and mass transit is not a competitor in areas where MIG has its toll roads.