tech/a,
I can't imagine why an insto would invest if there was not that fundamental belief?
That said, we can't assume they would be right. It could turn out to be a dog, and on balance many stocks do so PEN would be one of their many plays in the market in an effort to manage the risk and exposure.
The tricky part here is that the insto investing in PEN is PALA, not necessarily their "nominee" Citicorp, similarly for Blackrock and theirs.
Ordinarily I'd contend that such a nominee may have only a short term objective in the stock, but if you look back to the days before the sharelending agreement between PALA and Citi, between March - May 2010 Citi increased their holding from just over 6 million shares to 90 million. Now I appreciate this was at a time that Uranium was going up rapidly, pre Fukushima, but there's no evidence they have divested that holding and I believe they are closet Uranium bulls
For what it's worth, i've had a look at the Dec 12 and Jan 13 Top 20's, there was negligible change, refer:
I would love to see the share movement data of UBS (and Citi Nominees) PEN holdings since this agreement went into place and the beneficiary fees that applied to the agreements relating to the PALA shares. But almost certainly that data would ever be available publicly. If it was then maybe once and for all the speculation would be over regarding share movements.
Col, you won't see a change in Citi Nominees holdings. They have a "Prime Brokerage" agreement in place and as such any change in holdings by the third party being UBS requires no disclosure by Citi or UBS. Read up on the Non-disclosure aspect of these agreements with ASIC rulings.
I would love to see the share movement data of UBS (and Citi Nominees) PEN holdings since this agreement went into place and the beneficiary fees that applied to the agreements relating to the PALA shares. But almost certainly that data would ever be available publicly. If it was then maybe once and for all the speculation would be over regarding share movements.
I assume they have borrowed them to short? If so why wouldn't they show up on ASIC database of shorted stock?
Which they don't?
http://asic.gov.au/asic/asic.nsf/byheadline/Short+position+reports+table?openDocument
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Trembling Hand,
Whilst they have borrowed the stock, they would be considered the owners of the stock.
As such, selling that stock wouldn't be considered shorting (although they do have to purchase back at some point in time to hand back to the original owners).
I guess technically there is no short (ie if Pala were to sell & then buy back that isn't considered a short), although they would be submitting a number of change in substantial shareholders forms.
No difference here except another party is the legal owner..........all in my opinion.
Stormtrooper
Where a person (a seller) executes a short sale and relies on an existing securities lending arrangement to have a ‘presently exercisable and unconditional right to vest’ the products in the buyer at the time of the sale, the sale of the products is a covered short sale. Covered short selling is permitted under the Corporations Act 2001 (Corporations Act). For a detailed overview of the short selling provisions of the Corporations Act, please see Regulatory Guide 196 Short selling (RG 196).
Stormtrooper what you have described is exactly the Technical process of shorting a stock. Thats how it works.
It is no different from you being the "owner" or "holder" of 10m shares and decided to sell 5m, you don't have to report this sale as a "shortsell" position.
I do if I borrowed it from someone Off market!!
Its just a regular prime broker agreement. The fund (pala) enters into the custodian agreement, and the stock goes into a pool. UBS can now lend out that stock from the pool to short sell. Generally, if you locate stock from UBs, you'll have to place the order through UBS. Esp if the stock is hard to locate.
The short is then reported, because of the borrow was sourced from UBS.
the problem with this stock is management. MD thinks he is a rock star/movie star with a package salary that is in the millions, really? the stock itself is a dog trading in the 3's.
Looks like everything is lining up for PEN except the market cap.!
I'm wondering does anybody know why PEN commentary has been canned on the other Blogg?
I've seen the official statement, just wondering what went on behind closed doors..... if you know what I mean.
Thanks. J
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