BNB - Babcock & Brown

[thierry]

BNBs timely responses to marke shows a well managed entity..

Not to sure what are the implications at the end of the press release.. if someone can explain that'll be great.


ASX Release
31 January 2008
International investment and specialised fund and asset management group
Babcock & Brown (ASX: BNB) today clarified its relationship with Tricom
Equities (Tricom) in light of media reports over the last few days.
Phil Green CEO of Babcock & Brown said “I am confident that Tricom will work
through its current issues successfully. However in response to market
concerns, Babcock & Brown advises it is not a material creditor of Tricom and
our business is in no way impacted by the difficulties facing Tricom. Babcock &
Brown’s relationship with Tricom encompasses traditional stockbroking and
capital market services. In this regard we confirm the following:
• Neither Babcock & Brown, nor any of its senior executives, have extended
cash facilities to Tricom.
• Neither Babcock & Brown, nor its senior executives, have equity in the
Tricom business.
• Babcock & Brown has no current dealings with Tricom in relation to any of
its equity investments in its managed funds.
“Babcock & Brown currently holds one stock loan position with Tricom in a non
Babcock & Brown related stock, an approximate gross position of $50m and a
borrowing from Tricom of approximately $10m. In addition Tricom holds
convertible notes that Babcock & Brown owns in a listed entity, with a face
value of circa $10m, which are currently being redeemed by the issuer.

 

[DowJones]

Does anyone know of why Babcock is being sold off? Is it a case of 'throwing out the baby with the bathwater' in financials?

They have good analyst recommendations. Last trading at $17.55 when it was at about $28 before the Jan rout. All of this is on sentiment and debt fear. But has the company changed materially?

The results come out soon... anyone think they'll do well?

 

[TheAbyss]

Dow, i am of a similar opinion however they have been trending downwards since the first sniff of sub prime last june. I want to get in on BNB however the chart says not yet. I am thinking that if CBA show margin declines tomorrow BNB will go lower with CBA however, should CBA surprise we just might see BNB go up with it.

MQG is a better guide for BNB than CBA as i am sure we all know. I am looking for a change in the financial sector sentiment on good news from CBA tomorrow or a continuation of the slide.

 

[VViCKiD]

does anyone know when the results are due out ?
how do u find out on comsec when the results are due out ?

 

[prana]

does anyone know when the results are due out ?
how do u find out on comsec when the results are due out ?

Here
21 February 2008

- this your answer is too short means its difficult to answer questions directly, so I have to add some random jibberish.

 

[VViCKiD]

thanks prina ... can anyone tell my why this one is getting hammered ? It really doesn't make any sense to me ....

 

[Kalmsg]

Spoke to a broker and he believes that BNB has a way to fall in this market yet and could test the 13 dollar levels and maybe even the 12 dollar levels in coming months ahead.

He also sees macquarie suffering the same fate for a while and could test the mid 45 dollar levels in coming months ahead if this bear market continues as it is believed it will.

Very interesting times ahead.

 

[VViCKiD]

damn... .that's some terrible news...
in it for the long run but this is really testing my nerves.

 

[prana]

'never ask a barber if you need a haircut' tuggawar between that an 'get out while you still can'. I'm happy to hold but brokers make money from your transaction, surely they're going to take extremes, so you can buy back again when they see it recover. If $12 is the lowest it will go, then I'd be laughing. I'll put an buy order in tomorrow at $12 and wait for the party to come. In fact, if he's really that accurate, he could make a lot of money, why not stall at buying shares? Write out a call option at that price.

But wait, he's just like you or me, fact of the matter, he too cannot see the future, it makes no sense where he pulls those numbers from (maybe support lines?) but whatever it is, he won't cry from your lost, he'll only laugh from your trade. I'd forget those numbers and worry about the business conditions going forward instead. If your broker told you business conditions will definitely suffer from a lack od M&A or there's going to be a disaster in funds and infrastructure, it's hell of a lot more value than "the stock may reach $12" cause it may not, and he certainly cannot know that for sure.

 

[3MT]

don't forget about the 1 Billion $ worth of stocks coming out of escrow this week. (late last). That could add some downward pressure in the coming days/weeks, depending on how desperate the holders want to cash out.

If you believe in this thing long term, then stop refreshing the comsec screen

 

[thierry]

both BnB and MQG are seriously undervalued.. I think problems with companies like AFG are reducing inverstor sentiment in these 2 stocks..

BnB has plenty of capital to pick up companies now at cheap prices.. unfortunately their good buisness is not necesarily reflected in the share price we see..

Sure there might be less M&A activities, but there will be a few companies needing financial backing to stay afloat.. BnB and MQG in prime position to pounce on these..

-------------------my opinon only------

 

[barnz2k]

If you believe in this thing long term, then stop refreshing the comsec screen

LOL. Easier said than done. especially with too much time haha.
I'm really thinking about avoiding all stock news for a year and see what happens haha

 

[blinkau]

I purchased a decent parcel of BNB only to find out SGB will no longer lend against it there goes that large buffer I had in place, just a though for anyone who might be purchasing on a SGB margin loan. Even after informing them they still havent updated their online acceptable securities list I wonder how many other people have been caught out.

 

[mrgroundwork]

wow... that is pretty big to wipe the lending rate of an asx top50 company... understandable there is problems, like a Centro, but Babcock is still in good shape...

st george will lose customers over that...

 

[overule]

Got put options today. I have a feeling this stock will drop like crazy but will do well in the long term.

 

[VViCKiD]

crap... i wish i bought some puts as well ....
aahhhh ... can anyone tell me why this one is getting hammered so much ?

 

[michael_selway]

crap... i wish i bought some puts as well ....
aahhhh ... can anyone tell me why this one is getting hammered so much ?

Do you know what, in a a week's time, today's rpcie could be considered quite high

Earnings and Dividends Forecast (cents per share)
2006 2007 2008 2009
EPS 115.4 166.6 197.7 224.9
DPS 36.0 52.4 59.8 70.0

Date: 8/2/2008
Author: Paddy Manning
Source: The Australian Financial Review --- Page: 77
Credit Suisse banking analyst, James Ellis, has issued a note discussing theprospects of Allco Finance and Babcock & Brown. Ellis has suggested that thetwo Australian companies could face substantial provisions against the decliningmarket value of their co-investments in real estate funds, should they followthe lead of Macquarie Group. Specifically, Ellis claims Allco's 2007-08 netprofit could be affected to the tune of $A118 million, if it is forced to markto market co-investments in its managed funds

 

[VViCKiD]

We might need to wait a week. The report comes out tommorow...
I am really dreading this.. I hate this stock...

 

[vishalt]

I'm going to B&B report to cover this tomorrow.

Anyone have any particular questions? I'll be happy to ask lol, I personally want a comment from them after investor confidence in their business model has been shot down. I think SGB and CMC cut margins to BNB and the stock has been the most smashed after Alllco and MFS.

You know its funny, I called MFS, BNB, AFG and MQG up at work and asked them if they want to participate in naming their weekly hires for a weekly story.

MFS BNB AFG refused to participate and they are pretty horrible with dealing with the media and rather secretive, so I dare say these companies are not transparent.

MQG on the other hand is great with the media and stock has fared better and they participate in our "name who ya hired" section.

 

[reece55]

Do you know what, in a a week's time, today's rpcie could be considered quite high

Earnings and Dividends Forecast (cents per share)
2006 2007 2008 2009
EPS 115.4 166.6 197.7 224.9
DPS 36.0 52.4 59.8 70.0

The accounting issue Credit Suisse are referring to is impairment of associates in accordance with AASB 128 'Investments in Associates'. I suspect you will find that BNB have a buffer here - after the August correction, BNB still had about a 15 - 20% buffer of market value > book value. Even if this amount is lower and there is an impairment trigger event, Babcock and Brown has a very good argument to say the assets are not impaired at present. In summary, I would think it would be unlikely this will affect BNB results tomorrow - whilst it's not the right time in the cycle to buy BNB, they are easily my favorite player in the diversified financial sector....

Allco on the other hand is completely rooted...... But hey, nothing I haven't been saying for months.....

Cheers