The basket didn't develop as we expected. Specific reasons were responsible for this weak performance. A minimum dividend of 2% was paid for the period of 9th June till 9th July. The future development of the basket looks nevertheless promising.
The value of the basket lost more than 11% in one month (from 73.76 down to 65.25). If this development would reflect the overall development of the WSE we better should rethink our investments in WSE immediately.
However, if we consider the WSE Index we calculate for our derivative LWI (running as IPO on the WSE board)we get a completely different picture. The LWI34 which considers 34 selected titles rose more than 24% in the last three weeks and the one with 25 titles (LWI25) even more than 40% (see sidebar or www.slquotes.com/custom/lemur). This observation correspond much better with the fact that the Linden economy is growing.
The reasons for the weak perfomance of the LBF basket are of specific nature:
HCL: A constant under performer which lost almost 50% of its value in the last month. However, there are two things we have to consider. First Shaun Altman is dumping shares again. In fact this is not bad news as it will increase free float as he probably still need to be considered as an insider. Furthermore, it also shows us that HCL can support such transactions without being completely destabilized. However, WSE should over think their communication politicy. Monthly reporting would be more adapted to the short life cycles in SL and would give rumors no chance. HCL is one of the blue chips in WSE and should take some responsibilities in this matter. The share price doesn't express the real value of HCL if we anticipate future influences of upcoming WIC positively.
RDX: We still think that RDX is basically a promising technology company in SL also it lost >30% of its value since 9th June. Free float simply doesn't exist as the owner possesses more than 95% of the outstanding shares. For what reasons in the SL world does RDX need 100 million shares? Soon the ominous 90 day period will expire and RDX can sell their shares. We only hope that RDX will properly communicate about their future plans and ownership. If they do RDX surely has growth potential either the threads to invest in this company will be too high for a large majority of investors.
AIC: The value increased 100% from its initial price of 0.5 $L when it was introduced in the WSE. Since then however, it’s an underperformer as well. The last company communication dates from June 8 and is not very helpful. From their prospectus we learn that their shares are undervalued. May be, but how can we know when there are no figures available. The overall index over all shares is positive for the AVIX(see www.slquotes.com). AIC as holding of AVIX should theoretically profit from this development, so we are still optimistic about this title.
BNT: No figures, no dividend, no information about ownership - just outlooks. Apparently, BNT considers shareholders as pain the a... If the outlooks will confirm, the future of BNT shall be bright. We hope that BNT doesn't forget that the shareholders are the future customers of its SIM’s they already transform or still want to purchase. BNT gained some momentum during the a last week but this wasn't sufficient to break the bearish trend. A little more straight forward information could surely help the title to find back to growth..
SLM and AMA: Both companies are still start-up’s and before publishing their results went straight into a SPO. At the moment it is difficult to make any judgement. Both companies have important growth plans. There is no reason to doubt on them. The share values showed almost no movment and stay becasue of the SPO at 1.
Next period for LFB ends on 8th August 2007. We hope of course that the basket will catch up towards a maximum dividend of 7%
With our derivative LFB - LEM want to offer serious investors a vehicle with 100% capital protection but with high returns on their investment. Minimal dividendis 2%/month and maximal 7%.For more details about the condition of the derivative LFB see also our prospectus. http://wselive.com/company/admin/244.
Greetz
Casper Trebuchet
LEM, CEO
Home of derivatives (LFB,LWI)
No comments:
Post a Comment