MIG 0.00% 4.4¢ a.c.n. 059 457 279 limited

whereto now?

  1. 21,755 Posts.
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    Whereto MIG from here?
    MIG has caused me considerable heartache. Ever since the time that CBA sold 60M shares overnight in April 2002 MIG's SP has disappointed me. Various arguments were used against MIG …MBL's exorbitant fees and MIG management being too preoccupied with increasing the asset base so as to generate base and performance fees for MBL.
    I have basically stuck with and only sold when I was forced to in 2002 with Margin Calls from COMSEC.
    All this has been a valuable experience for me.
    But whereto from here.
    MIG is a relatively young company , listed in DEC 1996 with 50% of the M5 and the preferred tenderer for the ED as its seed assets. Now MIG has grown to be a worldwide owner of Toll road assets.A brief and costly dalliance with power generation in LOY Yang has come and gone. 90% of MIG's assets are in ramp up phase. Construction risk premiums are still on M7 in Western Sydney and SR125 in San Diego
    So in my view rerating of MIG will be ongoing in 2005-2006 for the following reasons
    (1) Traffic growth on the M6 Toll. The M6 Toll is now opened for over a year and month on month traffic comparisons will be the focus of attention. There should show a 20% increase in JAN, FEB, March, April . MIG should be moving to 100% ownership and refinancing should be emerging
    (2) The increase in the number of lanes on the 407ETR should result in continuing increases in VKT and incentives to use off peak times should be effective
    (3) Increased distributions. MIG management has said a priority. 13.5C in June 05. And then at least 15C in 2006 and 2007.
    (4) Opening of the M7 and SR125
    (5) New projects in Australia where MIG/TCL will combine. And in Europe and the US where govts are cash strapped and are looking to the SKYWAY project in Chicago as a model for getting private enterprise to design build and operate concessions.
    (6) The continuing failure of public transport will ensure that the motor car is the preferred transportation tool. It is estimated that 50% of the population will live in cities by 2040 and the cars will be very fuel efficient and small.
    For these and other reasons I see MIG being a very long term hold.
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