re: what could be the story

I posted this on the CNP forum. It relates to CER.

--------------------

It's probably Deutsche Bank (DB). Orbis, via DB, have bought 194 million CER shares this year and by my calculations another 7-9m since the last sub holder. They 'aint going to stop there either - if you look at the form 604, these are being bought for a number of entities that Orbis manage. They bought 24 million CER shares between 28th May and 15th July alone. Table 3 shows the volumes involved.

If you watch CER closely, the price is being carefully contained and lowered where possible (end of day, during the day and using pre-open sell orders to give the impression of a selldown and scare all the CommSec clients). Deutsche are also using a bot (we call him/her the Deutschebot) to buy a large number of small parcels. It appears that these are contributing to the large crossings we see regularly. The numbers involved are such that dumping large amounts to force the price down won't even be a blip.

It's frustrating to see, but buying tens of millions of CER shares without spooking the market is a delicate business and I'd say from watching CER long enough, DB are doing a very very good job.

There is also an impending sense of urgency with the CER annual report coming up. At the half-year report, you may remember the CER price spiked significantly despite the fact that CER announced a $260m loss. This was due to the realisation that the difference between NTA and SP was so large. When the annual report resets this value again in August, there is still expected to be a significant gap which the value investors love. JP Morgan have the NTA as $1.05, with a target SP of $0.75.

If there is a saving grace, it's that the number of shares in the market available to trade is decreasing. Remember CNP own at least half and Goldman Sachs another 5.4%. Once this reaches tipping point (which could be a way off of course) the price will have to rise due to basic economics.

..and sooner or later the spooked CommSec clients will all have bailed. Silly people.