Other than general widening of credit spreads, GBP flash crash. USD strength, vol etc. Maybe some institution is clearing out a position, or there is some issue regarding Perpetual's acquistion of Pendal. either way, I have bought in from 88-92.. its enough of a discount to NTA that running yield is close to 7%..(or will be as BBSW increases). assuming they achieve their target of o/n +300. at 88 its a 18.5% discount to NTA.. if that closes back to a 5% discount in a year, that is a 24% return including dividends.. hard to beat that. I rate this lower risk than MOT, which along with MXT and PCI all had a similar move in June with the bank and Tier 1 hybrid sell off. I participated in that but sold out of MXT and MOT This time Tier 1's are still bid, MOT is only at 4% discount to NTA , MXT is 3% discount to NTA. So certainly PCI is the better value. Credit spreads could easily widen from here, but it appears that we are being more than fairly compensated.
its always a bit scary when you can't find a good reason... i've asked a lot smarter people than me, and no one I know has come up with a good explanation...
keep searching.. Good luck.
PCI Price at posting:
88.0¢ Sentiment: Buy Disclosure: Held
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