Trading Halts

[Aussiest]

I've searched everywhere on these boards for an answer, but can't find it, so i'm asking you kind people!

To your knowledge, do share prices usually rise or fall after a trading halt?

The reason i ask is because ORI and CSL's prices recently fell due to trading halts. LEI is currently in a trading halt: i wonder how the price will go when it is removed

 

[white_goodman]

usually depends for the reason it was put on a trading halt.....

 

[Aussiest]

"Leighton today announced a 1 for 14 Accelerated Pro-rata Entitlement Offer ("Entitlement Offer") of approximately 19.9
million new shares ("New Shares") to raise approximately $700 million before expenses."

It also says the proceeds from the entitlement offer will be used to invest in plant and equipment... and that the board has decided the net proceeds will also be used to redeem 100% of the Leighton notes for cash on the reset date of 1 December, 2008.

Whatever that means.

I'm long on LEI, just thought i'd slip on in before the FY results. Damn sneaky of them to release this with the results.

 

[kenny]

Hi Aussiest,

As wg said, it really does depend on the reason for the Trading Halt. An announcement of a juicy takeover battle between multiple suitors will generate far more sp appreciation than say an announcement of an extra $1 billion in bad debts provisioning.

LEI's cap raising may well be OK, depending on how you perceive the ramifications. It highlights the need now for LEI to raise funding from outside its cashflow and the fact that it has a burgeoning order book. I do have concerns that there is little margin for error factored into the calculations. Multiplex stumbled with Wembly and other big players have had their troubles in the past, LEI included if you remember.

Cheers,

Kenny

 

[tech/a]

My observations are that they mainly fall.
If not immediately not long after.
The reason bing that most "' In the Know" factor
The announcement into the price prior to it.

The old adage.
"Buy the Rumor Sell the fact is very often the case."

 

[Aussiest]

Thanks Kenny and tech/a. See how we go, should be interesting.

 

[adluroil]

My observations are that they mainly fall.
If not immediately not long after.
The reason bing that most "' In the Know" factor
The announcement into the price prior to it.

The old adage.
"Buy the Rumor Sell the fact is very often the case."

And if you already got the shares lately these days it is better to sell on the
Rumor and buy back cheaper on the fact eg CAG NSL