up 24%, page-2

Hi Mack,

I tend to follow a lot of the telcos.

PWT's continued rise since the Roslyndale announcement was made has surprised me, as I honestly thought that the share dprice would languish (ie: drift back lower, rather than increase by nearly 75%).

Last week, I made a comparison between the fortunes of SLX and PWT, as at the time, both were similarly capitalised, but were very different in terms of debt outstanding, cash on hand, intangibles /"at risk" assets sitting as hard values on the Balance Sheet, etc.

At the time (ie: a week ago), PWT was capitalised at 95% of SLX's value (ie: ~$58m). Now, PWT is capitalised at ~165% of SLX's current value (ie: $91m vs $56m). In striking that level, PWT is also now closing in fast on CSFB's December 2002 (set) price target of 16c.

PWT is also now trading at a premium to its last stated
Net Asset position of $76m which still includes ~$180m in network assets /installed base.

Is this justified?

Hard to say, but there must be more than a few out there who are now thinking in terms of Tier 3 consolidation, etc, especially now that Li ki-Shing's ETSA Utilities has now also stepped into the fray (ie: comments attributed yesterday to Basil Scarsella to the effect that ETSA wants to build up its telco asset base).

I would, therefore, sugegst that some of those buying into PWT are doing so now on the back of a takeover /market aggregation opportunity, as opposed to business fundamentals.

Mind you, it could also have something to do with 2 major new telco sector reports having been published over the last few days, by ABN AMRO (9th May), and by JB Were (19th May).