Trading like this deserves its own post. These are the last ten trades in BMO.PR.L, as reported by the TSX:
| BMO.PR.L Last Ten Trades July 11, 2008 |
||
| Time | Price | Shares |
| 15:58 | 23.01 | 300 |
| 15:58 | 23.01 | 100 |
| 15:58 | 23.00 |
5,000 |
| 15:57 | 23.00 | 2,000 |
| 15:50 | 22.15 | 7,400 |
| 15:34 | 22.15 | 65 |
| 15:34 | 23.40 | 1,000 |
| 15:34 | 23.41 | 1,000 |
| 15:34 | 24.15 | 1,000 |
| 15:34 | 24.40 | 5,000 |
All the trades from 15:34 and 15:50, except for the odd lot, were with RBC as the seller; a total of 15,400 shares that took the price from 24.40 to 22.15. The closing quote was 23.00-24.68, 25×3.
Which leaves us guessing: forced seller? or fool?
BMO.PR.L started trading on April 3.
Is there a typo here? the 15:58 trade shows $13, but Yahoo! shows the low for the day at $22.15. I know stink bids can sometimes be filled, but…..
Speaking of BMO.PR.L, I noticed that the similarly structured TD.PR.? offering using the fixed rate reset is still for sale on TD Waterhouse. Looks like the fascination with fixed resets is about to vaporize in a market where everything and anything is going down fast.
Income trusts, another asset I am interested in, are being hammered these days. On the other hand, a 2-week chart of NDX (Nasdaq-100) shows a relatively flat situation (though with lots of volatility) and the SPX (S&P-500) is struggling hard to go down. US and Canadian corporate bonds are muddling along.
This suggests to me that bonds and equity are showing some degree of resilience, while “income” mezzanine items like prefs and income trusts are being dumped. Such behaviour can’t be about risk when the mid-risk securities fare the worst.
James is speculating about retail clients bailing out, which could well be true. I have been worried for some time about clients who saw posters at (e.g.) Canada Trust touting (in large lettering) 10% long-term returns from “income funds” who are now bailing out as they realize that losing money is a possibility, so we have broad-based (also indiscriminate) institutional selling from this source.
Once markets get stupid, stupidity can last a long time (up and down). I see the IXTPR pref share index closed at 810 today, down another 1% or so (and about 19% from inception 16 months ago). Bear market in prefs, you say? Perhaps coming soon.
Typo fixed – sorry about that, didn’t mean to give anybody complete heart failure.
This really looks like retail panic. Odd you should mention TXPR in the same post as fixed resets … stay tuned!
[…] went blahooey today all right! Yet another ghastly day, with some extremely sloppy trading (great market making there, guys! Keep up the good work!), not terribly exciting volume and … […]