SLF.PR.D : Clearance Sale Winding Down?

Well, here it is, the market’s been open for two hours and a mere 35-thousand-odd shares have traded. What a slow day! This might be an indication that the blow-out sale has run its course and the underwriters now have some shelf-space free for the next issue.

It is possible that this has something to do with the banks’ year-end: I will not pretend to be an expert on bank finances, but today is the first day that trades will settle after their year-end, which is October 31. Having sales settle on or prior to this date would go a little way, at least, towards deleveraging their reported balance sheets and improving their capital ratios – but I will leave it to others to determine how much of an incentive this was in the determination of blow-out timing.

All this is now ancient history, of course, and the question on everybody’s lips is “when are these shares going to recover? ARE they going to recover?”. My answer to the latter question is ‘I think so.’ Not ‘I know so’, because the market has a special way of humiliating those who profess to know its secrets, but this issue looks quite cheap by a variety of measures – and is actually trading at even-yield to Sunlife bonds, which means that, if we take the market price as fair, the perpetual nature of this issue is considered to offset the tax benefits of dividend income entirely. This does not sound reasonable!

 Timing? Holy smokes … making predictions about what the market will do is risky enough … making predictions about WHEN it’s going to do it is foolhardy! The price could go up tomorrow … it might go up by the end of November … it might, of course, never happen and leave me looking silly. The last blow-out was the WN.PR.E issue: I’ve prepared a HIMIPref™ graph of the price and Yield-to-Worst of this issue since issuance. It flatlined at $24.00 for a long time, but once it got moving, it moved quickly!

 Now, watch! As soon as I click the “Publish” button for this post, half a million shares will trade at $23.50! Such are the perils of forecasting!

12 Responses to “SLF.PR.D : Clearance Sale Winding Down?”

  1. […] PrefBlog Canadian Preferred Shares – Data and Discussion « SLF.PR.D : Clearance Sale Winding Down? […]

  2. […] See SLF.PR.D : Clearance Sale Winding Down?. It doesn’t look like it, at least as far as volume goes! […]

  3. […] The clearance sale mentality returned a little today, as the issue slipped a bit, to close at $24.06-09. The extremely comparable SLF.PR.C were quoted at $24.45-50. […]

  4. […] Up a bit today. Volume continues to be heavy after the clearance sale. […]

  5. […] Up a lot today! Gained 0.8717% (bid/bid); recovering from the sale. […]

  6. […] Closed at 24.25-33, 1×80. Will these things never settle down? […]

  7. […] Still seem to be huge chunks of hot shares looking for a home! […]

  8. […] Still trading heavily, despite all my expectations! Closed at 24.10-20, for a bid-YTW of 4.60%. […]

  9. […] Down 0.2058% on the day (i.e.: a nickel). I’m getting awfully tired of referring to the Clearance Sale. […]

  10. […] The clean-out sale continues, but at a slower pace! […]

Leave a Reply

You must be logged in to post a comment.