A Prime Time To Snap Up Bargains

The Sunday Age
13 April 2008
Christopher Webb

JUST one of the games being played out on the market is based on ANZ Bank's daily list of stocks that it has taken charge of following the Opes Prime collapse.

The list helpfully spells out exactly what stocks the bank is still holding and is looking to sell. Punters have been carefully perusing the list and throwing in bids on the stock exchange in the hope of picking up some real bargains. And bargains there have been.

But there is a cat-and-mouse game going on as it is clear that some care is being taken not to dump the shares at prices that could give rise to lawsuits alleging that the bank didn't use all proper care when it came to flogging the shares.

Hence, some selling is being executed and then the broker - The House of Fear has been entrusted with a good deal of the business - is backing off and disappearing from the trading screens, only to reappear when some buying support has built up. Nevertheless, some following this little game can do very nicely indeed.

Take listed company Intrapower, which floated last year at a buck a share through an underwritten offering by The House of Bell.

Intrapower's core competency, so it said at the time, was in "the measurement and management of the internet protocol networks needed to deliver B2B services".

As far as competency goes, one needs to look no further than the buyers of Intrapower shares on Friday.

As of Friday morning, ANZ Bank had 1,617,000 Intrapower shares on its books.

A few minutes after midday, Intrapower filed its third-quarter cashflow statement, which was a fairly bullish pronouncement by managing director, Gregory Kennish.

He reported strong cashflows and noted the company was on target to meet its full-year prospectus earnings forecast of 10 cents a share, accompanied by a fully-franked 5.05 cents a share dividend.

Move to around 3pm Friday. A lot of stock suddenly started to flow and by the closing bell nearly 2 million shares had been traded, almost all at 46 cents a piece. Compare that price with the dividend and earnings forecasts a share.

Was the bank the flogger of the shares? We'll have to wait and see.

That's not quite the end of the story. After the selling deluge at 46 cents, the scrip started to improve. Some sales at 53 cents, then at 55 cents.

Not a bad little turn, eh?

Jumbuck grab

ELSEWHERE on the ANZ Bank-Opes front, there is Jumbuck Entertainment, the listed mobile phone services outfit presided over by one Paul Choiselat (below).

As has been well documented, the bank took charge of 3,559,447 Jumbuck shares that were associated with Choiselat, a client of Opes Prime.

That exact quantity of shares was sold by The House of Fear on April 3 at 58 cents each and the broker doing most of the buying was E*trade. Following the dealing, a new substantial shareholder appeared on the Jumbuck register.

It was Sieana Pty Ltd, which has come aboard with nearly 5.4 million shares, representing about 11% of the capital. Sieana is associated with Thomas Sie Po Kiing, who in turn is associated with Bridge Capital, which manages a portfolio of investments in the information technology sector.

Kiing is a director of Melbourne IT and his stake in the company tips the scales at $15 million.

He joined the Melbourne IT board in 2002 after buying shares in the company very cheaply indeed in that year.

The bright side

THE Contango twins, Stephen Babidge and David Stevens, have not been swamped by the bearish sentiment sweeping the market.

In updates to Contango shareholders, they said while they had adopted a cautious stance when it came to new investments, the current market volatility would provide attractive opportunities for patient investors.

They said the local economy remained strong, the banking system was well capitalised and valuations of Australian shares were not at "bubble" levels.

"The Australian sharemarket is beginning to stabilise and we expect stock prices to start recovering in the second half of 2008." They pointed out that even after the 15% fall in the March quarter, the local market over the past five years had increased 18% a year.

Noting the rapid expansion of raw materials exports and increased commodity prices, they concluded: "The growth in our economy has been driven by sound fundamentals, and these remain intact.

"These trends will underpin continuing strong growth in the Australian sharemarket over the medium term."

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