ncp to kman , remmy, a , arthur ?, page-3

Hi Arthur,

Abn-Amro's warrant desk thoughts on NCP from this mornings post:

NCP: Didn’t mention it y’day so my apologies. A few things to mention today. Alittle early, but firstly, a results preview: They are due on Wednesday, 11 February (possibly the morning of Thursday, 12 Feb Sydney time). For 2Q04, we forecast US$721mn EBIT, up 12% like-for-like (excluding Sky Italia losses). This is a result of a recovery in Newspapers, continued cable momentum and a reduction in Fox network losses. That gives NPAT of US$323 and EPadr os US$0.24. Guidance as always well be key to trading this stock. Also, onto the Hughes deal again and the GM Pension Fund stock can come out of escrow on 22 January (under the deal, GM Pension Fund agreed to hold onto the stock for 30 days (they thought it was longer but this was clarified …probably because GM wanted to flog the stock first). How much stock? 121mn DPs. Everyone in town has an opinion on the overhang and how it will impact on performance in the s/t. We are in the camp that the overhang is an issue, a big issue, and one that will affect the trading of NCP in the s/term. Currency falling back to 0.7703 helps conversion so watch for some appreciation today in the NCP. However, Mind the Gap analysis, which is something we place a fair bit of credence on suggests that NCP is trading a significant premium to it’s listed peers. With stock at these levels, it looks like you are paying overs for the unlisted assets at these levels. We have argued consistently that buying it around 1150 (well, under 1200) is probably ideal. Like it for a medium long term punt at these levels, but for a trade, it’d be looking at it from the SHORT SIDE, particularly on any intra-day strength.