9 Responses to “January 17, 2020”

1. stusclues says:

   January 18, 2020 at 5:49 pm

   Update to TSX Preferred Share Market Tracker

   Thanks for the shout out James lol!

   According to my fancy pants Google Sheet model, as of January 17th there were a total of 3,649,227,797 preferred shares extant from the 401 issues on the TSX (which is all of them, excluding VB.PR.B which for some strange reason is not picked up by Google Finance, I think). This is a decrease of 4,201,361 since October 13th for a total shrinkage of 0.40%.

   This is UP 4,201,361 shares from January 13th, primarily because of a weird happenstance where Google Finance treated the update of the conversion of TRP.PR.A/F on different sides of the 13th. This meant that the TRP.PR.F converts to As were temporarily lost in space causing an erroneous (maybe “spurious” right James?) decrease in shares of both issues to appear. This is now “fixed” resulting in the appearance of an increase. Other changes picked up by my model included: a decrease of 872,300 shares of XMF.PR.B, a tiny decrease of 100 shares of LBS.PR.A and a decrease of 5000 shares of AX.PR.E. I haven’t done a detailed check to see if these latter decreases were erroneous/spurious.

   I love the idea of James “doing something like this himself”! Maybe a market size tracker on Prefblog?

2. stusclues says:

   January 18, 2020 at 6:23 pm

   ** Correction to above **

   This is a decrease of 14,707,448 (not 4,201,361) for a total shrinkage of 0.40% since October 13th.

3. stusclues says:

   January 23, 2020 at 10:57 am

   TSX preferred market inventory action Mon-Wed this week.
   Net reduction in preferred shares: 5,765,575
   Total reduction since Oct 13th, 2019: 20,473,023 or a net shrinkage of 0.56%.
   Components:
   DGS.PR.A -2915882
   DF.PR.A -2237865
   FFH.PR.D -1499258
   DFN.PR.A -310799
   LFE.PR.B -172600
   SBN.PR.A -76191
   LCS.PR.A -58900
   BPS.PR.C -15414
   BSC.PR.C -2224
   FTN.PR.A 24300
   FFH.PR.C 1499258

4. skeptical says:

   January 23, 2020 at 3:39 pm

   Thanks for your efforts. Really appreciated.

   Other than Fairfax holdings, aren’t all these just split shares?

   If you can post a list of what’s been gone during the October to now time-frame, perhaps more eyes can do some analysis.

5. stusclues says:

   January 23, 2020 at 4:54 pm

   Sorry skeptical – I don’t keep a record of all the holdings at each point in time. I can only look at the changes from my last recorded date. I can see the value in doing more but my main goal with this is just to understand whether the total market is expanding or contracting.

6. stusclues says:

   January 29, 2020 at 1:00 pm

   Regarding my simple Google Finance total market tracker, I note a problematic issue. During the past week, my tracker picked up a decrease of 2,885,496 shares in BRF.PR.E, from 7,000,000 to 4,114,504. Checking TMX Money, the share count remained at 7,000,000 (and still does) so I emailed BRF to find out what might be going on. They responded as follows:

   Thank you for your email. Total number of shares in Series 5 is 7,000,000. 2,885,496 are held by Brookfield Renewable and therefore the total in circulation is 4,114,504. Hope this helps to clarify any confusion.

   So for some reason Google Finance decided to deduct the non-circulating shares this past week while TMX Money has not. Clearly, since a reduction of this magnitude is enough to make a material impact on the overall reduction in the market, my simple model is, at minimum, imperfect.

   The obvious solution is to work with real time information robustly updated by the companies themselves without relying on third parties to aggregate the data. Although I’m attached to the idea of tracking the market size so as to understand the magnitude of change and thus theorize the impact of same of overall supply/demand for preferred shares, I’m left with the feeling that precision is going to be hard to come by in the absence of a lot more resources to develop this properly.

   James, any further musings as to how to include a market tracker on PrefBlog?

7. baffled says:

   January 30, 2020 at 9:10 am

   stusclues says: , have you considered e mailing tmx money and asking them why they did not change the share count ? your ” simple model” did pick up that 2.8 million shares are no longer in circulation , and that is the important information . i find the e mail response from brookfield very interesting , to me it is confirmation that as long as int rates stay at these low levels , and maybe going lower , buying the pref shares is the right thing to be doing .brookfield would have lots of different investments to choose from and they decided to invest in these pref shares . thank you for your work and comments .

8. stusclues says:

   January 30, 2020 at 12:26 pm

   baffled: I have not. It doesn’t appear that Brookfield Renewable has been purchasing these under their existing NCIB (which is limited to 700,000 shares BTW). I have asked for clarification as to how long they have been held and how they came to be acquired.

   In general though, I agree with your thoughts that acquiring prefs in the open market is the right thing to do with capital for many of the issuers represented in the market and certainly NOT issuing new prefs at the current blow out seniority spread is smart. Hence my thinking on the shrinking market.

9. stusclues says:

   January 30, 2020 at 2:20 pm

   Kudos to Brookfield Renewable for their quick responses to my emails. I am very aware that this is not always to be expected!

   Turns out that those BRF.PR.E have been held for quite some time. The pleasant Brookfield Renewables staffer patiently pointed me to a 2016 press release:

   BROOKFIELD, News, February 9, 2016 – Brookfield Renewable Energy Partners L.P. (TSX: BEP.UN; NYSE: BEP) (“Brookfield Renewable”) today announced that as of 5:00 p.m. (Toronto Time) on February 8, 2016, a total of 2,885,496 Class A Preference Shares, Series 5 of Brookfield Renewable Power Preferred Equity Inc. (TSX:BRF.PR.E) (the “Series 5 Preferred Shares”) were validly tendered to its offer to exchange each issued and outstanding Series 5 Preferred Share for one newly issued Class A Preferred Limited Partnership Unit, Series 5 of Brookfield Renewable (the “Exchange Offer”). The Series 5 Preferred Shares tendered to the Exchange Offer represent approximately 41.22% of the issued and outstanding Series 5 Preferred Shares.

   So why Google Finance managed to just get wind of this recently is a mystery and why the shares were never cancelled but just held in treasury is another one!