AEZ 0.00% 0.1¢ apn european retail property group

huge crossing of 3m shares

  1. 2,382 Posts.
    i note that today there was 4.3m of turnover, however 3m of those were crossed at $0.565. So the heavy volume was not actually true.

    The price held around $0.70 for the first hour of trade, so the market had 1 hour to see the annoucement. The price only started to driff lower after that and the sales were not huge slabs as suggested.

    For a stock with a market cap of around $400m, $2.5m in turnover is nothing, especially when 3m is crossed. Most of the trades below $0.65 were not sell at market orders and this suggests to me that it wasnt insto selling. Maybe people were shorting it knowing that the volume was thin because when the buyers came out at $0.55 the other buy orders quickly appeared. This suggest short covering to me.

    After reviewing the report i wasnt to happy with it, however on reflection a 3% fall in value is not that bad given what was going on in Europe and around the world. I also note the fact that the distribution will fall to $0.09 next year and this is to be paid from cash flow.

    The losses were from the FX and interest rate swaps used for hedging. The fact remains that the assets are producing income, while the hedging and currency movements are none cash items.

    The only real disappoint for me was the situation with the Spain property where it fell by 10%. This is the property that may be in breach of the loan covenant, however they have stated that the have until May to sort it out.

    The other concern was the potential for further deterioration in asset values, however if the properties remain rented and income is still being generated what else can you ask for?

    Even with an NTA of $1.04, a cash distribution of $0.09 its on a yield of close to 17%.

    APN are not idiots, they will be managing the situation, i would rather have them running it than anyone at Centro or Rubicon. AEZ is one of those stocks that you buy and dont look at for a while because while the report wasnt that great, it wasnt that bad and didnt deserve a 20% sell down, especially when most of the sell down came 1 hr after the annoucenment on thin volumes.
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