Forum Archive Index - March 2001

["tennyson@caverock.net.nz" <tennyson@caverock.net.nz>]

>
>I'm a small CEN holder. I received a letter from CEN
>yesterday which said that the share buy back scheme
>would cease on March 31 2001. I think this has been
>going on for about a year. During that time, they have
>acquired 4% of the share on issue.
> 
>I'm concerned that once the share buy back finishes,
>the shareprice will drift downwards as there are no
>replacement  buyers on the market.
> 
>Is there any precendence in this situation?

Chris,

If you look back at the Contact Energy announcements of
last year you will see that the end of Contact buying
up their own shares has been well signalled.


quote
-------------------
BUYBACK: CEN: SHARE BUYBACK COMMENCING 30/03/2000

Extract from announcement received:
Contact Energy announced that it intends to buyback up
to 5% of the company's ordinary shares (equivalent to
30,197,500 shares), beginning 30/03/00. The buyback
will be effected over a period not exceeding 12 months
through the purchase of shares on the NZSE and ASX at
market prices prevailing from tie to time.
--------------------- endquote


Personally I would be more concerned if the buying
continued, as if it did, this would go against the
directors previously stated intentions.   Future buy
backs have not been ruled out, but Contact have almost
finished what they originally set out to do.

I think the price of CEN *may* well slip a bit after
this buying ends.   Then again, Contact may announce
another buyback program.  CEN is more an income share
than a capital growth share.  I think you'll find that
the dividend yield looks pretty good if you compare it
with bank term deposits.  It looks like world interest
rates are heading downwards which means that income
producing shares (like Contact) are headed upwards.

So if anything I'd be looking at using any dip in price
at the end of the month, if it occurs, as a buying
opportunity. SNOOPY

disc: Hold CEN as an income share, so am not too
worried about minor fluctuations in the share price.   





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