Monthly Archives: January 2012

Unicredit rights issue – update

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Tomorrow will be the last trade date for the subscriptions rights. So far, the shares are doing really well. the subscription rights recovered from a low of ~0,45 cents to currently around 2,12 EUR.

This is still well below the theoretical value of 2.29 EUR ((3.09-1.943)*2).

Looking at the relative Performance:

Since the rights started trading (January 9th), Unicredit has outperformed the FTSE MIB by +35% and competitor Intesa by +25%, howver since January 1st, Unciredit has underperformed the MFTSE MIB and Intesa by ~-26%

In the last few days, some good news emerged:

– the Abu Dhabi Sovereign Wealth fund had committed to increase its stake
– Zurich Financial Services seems to be interested in buying part of the Turkish JV

So from a investment point of view, a lot of the forced selling seemed to happen in the first 2 days of the subscription right trading period. I had expected that towards the end the price would come down again but it doesn’t look like that at the moment.

Dispite the significant discount of the rights, I will not start a long/short trade, as a lot of the expected outperformance has already occured in the last few days.

Special Situation: DJE Real Estate fund (LU0188853955) in liquidation

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EDIT:I have changed some parts of the Post, especially with regard to the summary and the risk section !!!

Preliminary remark: a reader emailed me this idea, thank you very much. But please don’t forget: This is not meant as an investment advise, please do your own homework !!!! I might own already shares of any discussed inevstment personally and many of the invetsments discussed are relatively illiquid.

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Unicredit rights issue watch & correlations & some research for deeply discounted rights issues

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Unicredit:

This is not really a surprise: Today, on the first day the Unicredit rights traded separately (Ticker: UCGAA), the pressure on the stock continued.

The theoretical price of the right at the start of the day would have been 1,26 EUR, currently they are trading at ~95 cents, after hitting a low of ~85 cents in the morning. With the share at 2.44 EUR (again -7%), the theoretical price should be (2.44-1.943)*2= =0.994 EUR, so there is only a slight mispricing at the moment.
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Efficient capital markets – Unicredit rights issue edition

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In any finance course, market efficiency is one of the most important parts of the curriculum. The Therory says the following:

There are three major versions of the hypothesis: “weak”, “semi-strong”, and “strong”. The weak-form EMH claims that prices on traded assets (e.g., stocks, bonds, or property) already reflect all past publicly available information. The semi-strong-form EMH claims both that prices reflect all publicly available information and that prices instantly change to reflect new public information. The strong-form EMH additionally claims that prices instantly reflect even hidden or “insider” information.

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Strategy 2012

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After the 2011 review, I wanted to quickly summarize my general strategy for 2012.

1. In general I don’t think that I am able to predict any stock market levels, fx rates or interest rates. For me, “tactical” assets allocation, which means siwtching assets classes or moving in and out of cash does not provide any systematic upside. However I believe that absolute market levels (esp. FX and interst rates) have some predictable influences on certain business models.

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