BIL brambles industries limited

upside near

  1. 7,397 Posts.
    BIL
    Brambles could pull up next week briefly ? after the big sell down on Friday

    Studying the chart on Brambles it appears that BIL is trying to form a bottom and bouncing off $6.40 a few times trying to consolidate between $6.40- Low and $6.95 –High

    MACD is looking a bit more bullish but not totally convinced that this is its pivot point as you can see what is called a bearish flag forming

    Although the P/E ratio seems a tad High for this p.e sensitive market at 21.54
    so a break through $6.40 would see more downside



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    November 9 2002


    More than $275 million of Brambles shares were pushed through the Australian sharemarket yesterday, depressing the company's share price in an international share play that went horribly wrong.

    The shares were traded between two international hedge funds who apparently were attempting to take advantage of the price gap between the Australian market and Bramble's UK listing.

    More than 42 million shares - 4.4 per cent of the company - were in a single trade at $6.57 per share before the market opened.

    The trade dragged the share price down more than 25c at one stage, before it closed down a more modest 16c, at $6.59.

    A number of theories about the trade circulated the market.


    UBS Warburg, which did the trade, is understood to have told institutional clients that an international hedge fund had finally closed an arbitrage position which had gone wrong.

    It is believed the hedge fund had gambled on the price difference in Brambles shares in the UK and on the local exchange. When the gap between the prices failed to narrow, the decision was taken to wind up the position.

    Dealers said Brambles UK listing had been trading at an 11 per cent discount to the Australian-listed stock when the trade was executed.

    Several other theories being tossed around the market included a local institution's opening its own arbitrage position by selling the locally listed shares to a UK-based hedge fund. The institution was expected to buy UK listed stock when the market opened overnight.

    "They believe that spread will come back in again ... they are happy to buy [the UK] stock at an 11 per cent discount hoping that it will come back. The other side was a hedge fund which might be expecting the discount to blow out even more," one dealer said.

    Another dealer said an overseas pension fund might have sold in the Australian market to buy in the UK last night.

    One suggestion was that international giant Capital could have been behind the trade.

    "The UK stock might be flogged on to a potential investor who wants to up their stake [in Brambles]," the dealer said.

    Brambles spokeswoman Edna Carew said: "To the best of our knowledge, it is a shareholder moving from one Brambles to another Brambles. That is as much as we know at this stage."



 
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